But rather than fear for its life, the company used the Mexican currency to make a killing.
“From the new business perspective, it has been phenomenally successful,” said Andrew Gamm, director of brand development for Pizza Patrón.
Once it started selling pizza for pesos in January, the company’s same-store-sales rose by almost a third from the previous year. Pizza Patrón has now opened six new stores, with plans for 15 more throughout Nevada, Arizona, Colorado, California and Florida by the end of the year, and 40 more in 2008.
The Texas chain is hardly alone in trying to turn foreign currency into retail gold. Stores in US cities ranging from Dallas to Waikiki have found that accepting international currencies can entice immigrant and tourist shoppers, happy to save a trip to the bank.
It is about convenience. If somebody walks in and they only have 4 American dollars, but they have the equivalent of 10 dollars in other currency, a store we’ll help them out,” said Ron Paul, president of Technomic Inc., a Chicago-based restaurant market research firm.
Caught in the centre of a nationwide debate about work permits, health care and legal amnesty for illegal immigrants, stores like Pizza Patrón are sometimes accused of breaking the law. But according to the Treasury Department, international currency is a legal form of payment in the United States, unlike in some other countries.
A yen for more business
Retailers in popular vacation spots, have caught on to the trend, realising that foreign currency may lure affluent international tourists.
At the Royal Hawaiian Shopping Centre in Waikiki, luxury chains like Bulgari, Fendi, Cartier and Hermes accept the yen, and say it attracts Japanese travellers, especially when the currency’s value is on the rise. The Salvatore Ferragamo store in Waikiki’s Royal Hawaiian Shopping Centre averages about $12,700 in yen business transactions per month. But the store factors in certain risks by trying to profit off the vagaries of the $2 trillion a day currency market.
“When the yen is down, shoppers spend less,” said Gillis Asao, general manager at Salvator Ferragamo in Waikiki.