Pizza for pesos marks decline of dollar

By Rachel Breitman

NEW YORK (Reuters) - When Pizza Patrón announced plans to accept Mexican pesos in its 59 Southwestern stores, the Dallas-based fast food chain was besieged by anti-illegal immigrant hate mail and even death threats.

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 U.S. 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'll help them out," said Ron Paul, president of Technomic Inc., a Chicago-based restaurant market research firm.

"I think the only negative stigma is that it sounds like it is supporting illegal immigration," he added.

Caught in the center 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.

MAKING MONEY ON MONEY

The American dollar has been widely accepted in global marketplaces for years, though U.S. retailers were slow to embrace the idea of international currencies.

But as the dollar has declined in value, some national chains started to see pesos, Canadian dollars, and even yen translating into big business.

Wal-Mart Stores Inc. accepts pesos and Canadian dollars in its U.S. stores near the Mexican and Canadian borders, using a currency calculator on the price register to update values each day.

In fact, more than 50 percent of U.S. retail firms along the northern border take the Canadian dollar and 21 percent near the southern border accept the peso, according to research by Michael Pisani, professor of international business at Central Michigan University.

"The U.S. dollar is not the exclusive global currency it was a decade ago," he explained.