As the economy grinds to a halt and spending hits an all-time low, sales of lipstick are soaring.
It is well known in financial circles that when times get tough women stop splurging on the large extravagant purchases, such as status bags or Botox, and start treating themselves to small luxuries like lipstick.
It may sound implausible. But ever since the Great Depression of the 1930s, female lipstick buying patterns have been the reverse of market indexes. The index plunges, lipstick sales soar. A variation of this trend occurs in war, when sales of blood-red lipstick suddenly take off, although no one knows exactly why.
During the weeks after 9/11 lipstick sales rose significantly and now, as we head into a global recession, lipstick sales have quite simply exploded.
One explanation may be that lipstick, from €1.95 to €25, is a quick feel-good fix that allows us to shop without having to buy a new outfit.
So, when our lips are red, inevitably so is the economy, and the recent figures from L'Oréal, Beiersdorf and Shiseido confirm this.
In the first half of the year, L'Oréal showed like-for-like sales growth of 5.3% and Dhaval Joshi, analyst with RAB Capital, says this indicates the ‘lipstick effect’ has returned once again.
"The evidence shows that when budgets are squeezed, people simply substitute large extravagances for small luxuries," he said.
