Pizza for Pesos

The Pizza Patron chain is running a promotion where pesos will now be accepted as currency in its restaurants. Interesting move. Tap into unspent assets, create a differentiating factor to your business (if Pizza Hut won't accept pesos, and Pizza Patron will, and you have pesos to spend, off you go to Pizza Patron), and build loyalty in the fastest growing segment of the US population (besides, of course, Hydrablog readers). Nothing illegal about it, and they bump profits by upping the exchange rate by 9% (from 11/dollar to 12/dollar) in effect increasing the price of the pizza by about 9% (some decrease due to exchange fees). The great thing is they get to charge more without actually raising the price of the pizza and suffering the negative side-effects of having a costlier product. In fact, for those affected, they elect to buy the more expensive product, while thinking better about the company.

Of course the negative side-effect are those who think you are doing wrong and who will no longer eat at your restaurant. And they are there, read the article.

Overall, a great experiment and I applaud the management for creating and implementing it. My personal bet is that it's a long term winner. The furor will pass, but the benefit will stay. What may actually help the furor pass is if other chains realize that you can charge more and create good will and jump on the bandwagon.