Lipstick sales rise amid falling consumer confidence
Lipstick sales could be the unlikely harbinger of tight economic times ahead, if sales figures at John Lewis are reflective of the wider economic climate.
Both beauty and womenswear sales increased at John Lewis which could indicate that the 'lipstick effect' - the theory that consumers facing an economic crisis will be more willing to buy less costly luxury goods like lipstick - has arrived.
Paula Nickolds, managing director of John Lewis said that this 'lipstick effect' of women making spontaneous purchases has propped up sales at the department store, despite a consumer slowdown.
Paula Nickolds, Commercial director of John Lewis said that a 7 per cent rise in cosmetics sales could be an early warning indictaor about tightening economic times for consumers
She said that sales on more expensive items had staled but other categories had risen, with beauty and womenswear climbing 7 per cent and 4.4 per cent respectively.
'We believe those numbers to be significantly ahead of the market. Perhaps it's the lipstick effect, as we might have called it back in the recession,' she said.
'It's the more considered categories, the arguably deferrable spend, that we're seeing most affected by the uncertainty in the macro conditions â€" so those big ticket categories are currently trading just behind last year,' Ms Nickolds told The Guardian.
The 'lipstick effect' is the theory that when facing an economic crisis, consumers will be more willing to buy less costly luxury goods like lipstick while postponing larger purchasesÂ
'The backdrop is very uncertain and it was made worse by the tragic events that happened across British cities over the last few months,' she said, referring to the terror attacks in London and Manchester.
She said that many customers are feeling 'uncertain and worried about what the circumstances will mean for their future financial prosperity' and are changing their shopping behaviour.
After the 9/11 terror attacks in New York, retailer Estee Lauder noted that sales of its lipstick had soared.
Leonard Lauder called it the Lipstick Index â€" and said that this alternative economic indicator could reflect the state of the economy b ecause purchases of cosmetics â€" lipstick in particular â€" tend to be inversely correlated to economic health.
Estee Lauder boss Leonard Lauder called it the Lipstick Index â€" and said that this alternative economic indicator could reflect the state of the economy
But the theory was first identified during the Great Depression when cosmetics sales rose between 1929 and 1933 while industrial production halved in the US.
Ms Nickolds insights into the current manifestation of the trend in Britain are supported by official data.
According to the Office for National Statistics, Britain is experiencing a rapid decline in living standards with the biggest squeeze in workers' pay since 2014 while the unemployment rate remains at 42-year low.
Regular pay adjusted to account for inflation fell by 0.6% year on year in the three months to April.Â
It was the weakest data since the summer months in 201 4, according to the ONS. Â
Sofa retailer DFS released a surprise profit warning last month, blaming falling consumer confidence for a slump in the number of visitors to its stores.
Sales in sparkling wine and perfume cam also experience a boost during a downturn
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