The lipstick effect – warning signs for the economy?

If you want to know where the economy is heading then a look at inexpensive treat items is often a good indication that things are not all well. The boss of John Lewis last week pointed to a return of “the lipstick effect” – when a rise in sales of beauty products heralds a consumer squeeze.

With disposable income under pressure, shoppers are holding off on buying big ticket household items like sofas, beds and washing machines. But tough times also encourage shoppers to treat themselves, and history has shown that sales of cheap thrills – from lipstick to takeaway coffee, expensive perfume, skin cream and sparkling wine – can do well in a downturn. Subsequent fears about a slowdown have been sounded.

 

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