Back in 2001, Leonard Lauder, then the chairman of the cosmetic giant Estée Lauder, described the relationship between the state of the economy and the sale of cosmetics. After September 11, he noticed the sales of lipstick jumped higher and suggested that the sale of lipstick was a good measure of the health of the economy; when the economy was down, people bought more lipstick. He dubbed this phenomenon the “Lipstick Index”

Similarly, during the Great Depression, it had been found that cosmetic sales increased despite the enormous reduction in disposable income.  During World War II, lipstick sales were on the increase; whether that indicated difficult economic times or just the availability of non-rationed, desirable, and affordable products is difficult to determine.

Some fashion aficionados, on the other hand, suggest that it is the hemline of dresses, whether they are long or short, that indicate the state of the economy instead of lipstick sales. Sports enthusiasts suggest that which team wins the Super Bowl is a predictor of economic times.

The origin of the “Lipstick Index” – being observed and coined by a cosmetic company who would clearly derive marketing benefits from its acceptance and popularity – does incite scepticism and doubt about its reliability; yet, the concept of people enjoying an affordable product during difficult economic times does resonate as a logical conclusion.

Noted wine consultant, Jan Fredrikson, finds that people are trading down to less expensive wines that they consider of value.

When looking at the cost of dining out, consumers will make less risky choices and stick with grape varieties and regions they are familiar with. In South Africa, Merlots and Cabernets (or Boudreaux blends) wines are easy to recommend since they offer consistent quality at a great price and pair well with a broad range of foods.

Source: corksavvy.com