Lipstick Index: The Beauty Industry Is Holding It’s Own Despite Inflation

In January 2023, the overall U.S. Consumer Price Index cooled slightly to 6.4%, continuing a seven-month decline. However, the lipstick effect remained strong.

According to NielsenIQ, the beauty industry is dealing with a 10% average unit price increase every year, with color cosmetics and nails, facial skincare, and haircare taking the lead. Despite these price increases, consumers continue to purchase small luxury items, such as lipstick, even during economic downturns.

Historically, the beauty category has defied the laws of recession, showing a significant uplift in sales due to the lipstick index. Consumers tend to shift spending away from other products, such as electronics or home appliances, to beauty-enhancing products in the beauty category.

This includes the skincare industry, as researchers theorize that the products being purchased by women are in any category that enhances their attractiveness to men. During the Great Depression, makeup sales actually increased between 1929 and 1933, while industrial production plummeted 50%…