Description: The Lipstick Index is perhaps one of the most unusual measures of economic performance you may have encountered. Essentially, this measure says that when times are tough, consumers will still avail themselves of smaller luxuries like skin care and perfumes in the face of cut backs on larger purchases. Leonard Lauder, the former CEO of cosmetic firm Estée Lauder, was the first to coin the term. Economists at California State University established the phenomenon was confirmed by economic data emerging from the 2008 financial crisis recession .

Date:  November 29, 2023

Source:  cbc.ca

 Link: https://www.cbc.ca/news/canada/calgary/lipstick-index-beauty-sales-1.7041218

Discussion points:

1) Had you ever heard of this Lipstick Index?

2) Do you think the principles of the Lipstick Index are valid in the lives of you and your classmates?

3) Page 5-1 of Wiley’s Financial Accounting: Tools for Business Decision-Making introduces us to Loblaw’s subsidiary corporation Shoppers Drug Mart. What percentage of Shopper’s revenue comes from its cosmetics trade?