The shadow cast by the cost of living crisis has spurred a retreat into small luxuries with Britons cheering themselves up with mood boosters such as luxury lip balms and false nails as well as chocolate and coffee.
The lipstick index, coined by Estée Lauder’s Leonard Lauder, is the idea that sales of affordable luxuries rise in economic downturns. This spending behaviour has been true during previous downturns and the same picture is emerging again as consumers battle severe financial headwinds.
“We’re seeing customers treating themselves with smaller beauty luxuries to add a little extra joy to their everyday lives,” Jade Baker, the beauty buyer at the department store chain John Lewis, said.
In keeping with the index shoppers are coveting lipstick, with Clinique’s £21 Black Honey among the chain’s bestsellers after it became a viral hit on TikTok. Eyeliners and mascaras are also selling well with high street rival Boots reporting strong demand.
The Boots managing director, Seb James, says its products are a relatively inexpensive indulgence with customers using its Advantage loyalty card to collect points so they could treat themselves to new makeup, perfume or skincare.
“During the last recession, we experienced two things: firstly, the ‘lipstick effect’, which is the determination to continue purchasing small treats, and secondly, increased spending on own label and promotions,” he said. “These trends have returned. People might not get a new outfit but they may get a new lipstick.”
The market research firm Kantar Worldpanel said that in the 12 weeks to 18 September sales of lipstick were nearly 10% higher than last year. During the period 310,000 new shoppers had decided to buy lipstick, a near-20% rise that was the biggest step up since May 2021 when the increase was set against steep lockdown declines.
“We are starting to see the performance of lipstick improve dramatically to correlate with the cost-of-living crisis,” Matthew Maxwell, the strategic insights director at the firm, said.
However fashions change and Emma Fishwick, an analyst at the data firm NPD, says the lipstick index is a bit different this time round as rather than just being a question of which shade to buy, in keeping with a bigger trend to spend on skincare, women wanted products that were also moisturising, such as a balm or oil, or were environmentally friendly and could be refilled.
Another emerging trend is DIY manicures according to Fishwick, with sales of nail makeup up by a fifth in August as consumers who perhaps could not afford a trip to the salon applied a coat at home.
While the lipstick index is an established economic indicator Jonny Forsyth, an analyst at the market research firm Mintel makes the case for an “indulgence index”. He said consumers were also treating themselves to posh chocolate and coffee to enjoy at home.
After clocking up big sales during the pandemic, the ethical chocolate brand Tony’s Chocolonely said it was once again experiencing demand for its bars, which come in flavours such as milk pecan caramel crunch.
“September was the first month this year where we saw the value of chocolate bars bought go back up again, after a really strong prior year,” Ben Greensmith, the brand’s UK country manager, said. “We might be seeing this uptick again as more people treat themselves at home.”
In a recent poll nearly half of adults told Mintel it had been easier to justify eating indulgent food and drink since the Covid-19 pandemic and among chocolate fans 56% said eating premium bars “was a good way to boost your mood”.
“During Covid a lot of people thought consumers would eat more healthily but the reverse happened,” Forsyth said. “They indulged more because they felt psychologically under pressure and turned to comfort food.”
Now with energy bills and mortgage payments to worry about Forsyth said people were looking for something to give them a bit of a boost during the week. “Food and drink is still relatively affordable and gives a visceral sense of pleasure and escapism. We’re already seeing it and I think this trend will only increase through what will probably be a very dark winter,” he added.
During tough economic times people tend to spend more hours at home with meals out, pub drinks and cinema trips among the casualties. Tim Martin, the founder of the JD Wetherspoon chain, has complained that its pubs are struggling because people are staying in and drinking cheap supermarket beer.
But some unlikely winners are emerging too. Hollywood Bowl, the UK’s biggest tenpin bowling operator, says it experiencing huge demand for its lanes as, with a family of four able to bowl for about £20, it offered affordable fun in tough times.
• This article was amended on 15 October 2022. An earlier version had mistakenly referred to Tim Martin as “Tim Wetherspoon”.
