BCBusiness

Paul josePH january 2016 BCBusiness 31 whose recently published book Acquired Tastes examines the way families eat, says some of the wild variation in what people say they spend on groceries may come from what food means to their social identity. If they are low income or from a particular culture, "frugality is a moral value." Other researchers have noted that Canadians have always had a slightly less full-blown consume-to- the-max mindset than Americans: we were slower to buy automatic washing machines in the 1960s and still tend to buy smaller cars and live in smaller houses. So there might be more of a tendency in this country to believe it's moral to be frugal about food—and that could account for some of the strange under-estimates of the grocery bills. That said, not everyone underestimates. Chapman notes that more middle-class people—who are not strapped and are defining themselves in part by the way they eat—might be happily spend- ing a small fortune for the best olive oil ("Being frugal is not necessarily their goal"). Certainly Jacqueline Sheppet, as surprised as she was about her car expenses, doesn't kid herself about what it costs to eat. She estimates that her three-person household (the couple has a small child) spends $1,200 a month between groceries, take-out sushi or pizza and the occasional meal out. And that's after taking the trouble to shop on the east side for groceries, where things are cheaper. Something that would help people like Sheppet and Ramos is more financial-literacy training at an earlier age. Last year B.C. became the first province in Canada to introduce such training as part of its high-school math curriculum, but it's still lacking in most of Canada—a fact that both education and finance experts deplore. In the meantime, behav- ioural economists are discovering ways to nudge people into better financial planning. When sub- jects of the Sussman and Alter study were told to "It wasn't the housing indus- try collapse that hit us–it was the credit crisis, because people didn't have the credit to be able to buy anything. in 2008 we were on pace to do $50 million in sales, and then lehman brothers collapsed and all of a sudden sales were less than half. That caused all of us to look deeper at what we had. because of the way we built our business around logistics, we had the data to tell us what was selling. We looked at products on the other side of the ocean, that were being shipped on a long lead time, and we said to manufacturers, 'Put your inventory in our warehouses on this side of the ocean, because we think we have the perfect signal that will tell you exactly what to sell and where to sell it.' Manufacturers started to do that in early 2009. even though the market was bad, the demand actually exceeded supply. We kept running out of stock, and the business was accelerating again–but we still didn't have enough money to support it. i went home to my wife and said, 'it's going to be a zero unless we go all in, and that means selling our house.' i believed it was a 100 per cent chance that we would suc- ceed, but i told my wife it was a 70 per cent chance. i told her that because i wanted her to understand the downside. The truth of it was probably a 50 per cent chance. We talked about what it would look like in a complete col- lapse. and we realized that the only real downside was letting it fail right then. so we sold our house in richmond and rented a really small house. some other friends came in with me and we put together a funding round of about $5 million. We invested more in data. six months later oMers [ventures] saw how much the busi- ness was accelerating and invested $16 million. We tend to look at everyone else's lives and see only the high points. but lives don't look like that. in fact most of the value comes from the lows. you find out who you are, who your friends are, and what you're capable of." • Je f f Boo T H P R E S I d E N T A N d C E O, B U I L d d I R E C T K now n for : Selling flooring and building materials online and shipping directly to customers 4 that because i wanted her to small house. came in with me and we put together a funding round of about $5 million. We invested more in and invested $16 million. everyone else's lives and see only the high points. lives don't look like that. most of the value comes from "We have some sort of denial about what it costs to live," says financial planner Simon Tanner. "When people tell me they spend $400 on groceries and $200 on eating out, I can guarantee it's the reverse of that and higher in each category"

• Cover