The Lipstick Index : Rating the Economy

by | Nov 27, 2020 | 0 comments

The Lipstick Index is a statistic economists use to measure the spending level of women. The theory is that the more depressed the economy the higher the spending on lipstick. The premise being that women purchase inexpensive luxuries during a bad economy. The Lipstick Index was conceived by Leonard Lauder during the economic downturn after 9/11. Lauder is the son of Estee Lauder and CEO of Lauder Cosmetics.

This economic truism however was debunked during the current pandemic’s global economic slowdown. Covid 19 forced women to stay at home and wear masks when venturing out negating the need for lipstick. Lipstick sales are down 44% since February.

It seems there has been a switch to nail polish and skin care products from lipstick sales. This trend is not new. Since 2010 nail polish has replaced lipstick as the main affordable indulgence for women throughout the world! Replacing handbags and shoes during recessions. The Nail Polish Index has now replaced the Lipstick Index.

Under the pandemic certain industries have taken a harder hit than others. The worst being arts and entertainment, travel, retail, hospitality/tourism, and restaurants. Following are several other off-beat indicators and how the have performed under the virus:

  • The Champagne Index – Up 18%
  • RV Sales Index – Up 11%
  • Canned Meat Index – Up 58%
  • Pants & Shoes Index – Down 13%
  • Cardboard Box Index – Up 8%
  • Beard Gauge – Down 8%
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By Jim Lavorato

Jim Lavorato is the founder of 4M Performance which is designed to assist businesses to survive and thrive in these uncertain times. Jim launched an entertainment-related company in 1988. He was at the forefront in cinema technology and helped spearhead the movie industry's transition to digital presentation and distribution. He also co-founded the Arboreal Group, an environmental consultancy. He has published articles on the motion picture and media industries and is a contributing editor for ScreenTrade magazine and writes a blog "Cinema Mucho Gusto". He is a certified SCORE Mentor in the SCORE Greater Phoenix Chapter and lives in Scottsdale, AZ. Learn more about Jim in his "About" page.

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