Lipstick Index

Leonard Lauder's 2001 theory: lipstick sales spike in downturns as affordable luxury. Holding up suspiciously well.

Estée Lauder chairman Leonard Lauder coined the Lipstick Index after observing a spike in lipstick sales following the 2001 recession. The theory: in downturns, consumers trade down from large luxury purchases (handbags, vacations, cars) to small, affordable indulgences. Lipstick as proxy for the affordable luxury impulse. The index has had mixed predictive success but has shown renewed relevance in the post-2022 period, as consumers squeezed by inflation and high interest rates continued cosmetics spending while cutting back on larger discretionary categories.