Lipstick Sales Are Up. Some Take That as a Warning

Makeup sales are up—which, according to a groundhog-shadow-like barometer called the "lipstick index," might spell bad news for the economy. CNN explains that the term "lipstick index" was so named by Estee Lauder chairman Leonard Lauder in 2001. He posited that during the economic downturn in the US at the time, women purchased lipstick as "small pick-me-ups" while buckling down on more expensive buys. During this period, lipstick sales increased by 11%. So do strong sales in the makeup industry mean we need to start scrimping? CNN admits the lipstick index isn't a technical analysis, and can be as accurate as using the groundhog's shadow to predict spring weather, but is still "worth exploring."

Sephora recently announced a record sales year, while research group Circana reported a bump in prestige beauty sales (9%) that has outpaced mass beauty consumption (2%). Overeon CEO Neela Montgomery says that the surge in high-end cosmetics over lower-priced ones is most likely due to the "micro-moment of pleasure that people can treat themselves to" when using a special product. Independent writer Helen Coffey suggests that the term "indulgence index," to encompass other small luxuries like fancy chocolate, might be more accurate. Forbes agrees that lipstick isn't the only quirky economic predictor. Others include men's underwear, hair dye, and champagne (which tend to see a drop in sales during harder times).

The lipstick index has held during some periods of economic decline, like the Great Depression, or during the pandemic (when it was more of a "moisturizer index" as skincare items boomed), and it's a trend that may feed on itself. "We are a herd species that's deeply influenced by what other people do—so if we see that a particular product is popular, we are more likely to consider buying it ourselves," The Choice Factor author Richard Shotton tells the Independent. "That means a small increase in popularity can actually lead to a product becoming much more successful." (More recession stories.)