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There may be trouble ahead, says "Lipstick Index"

Date Published : Monday, June 16, 2008

The so-called Lipstick Index, the historic trend that shows sales of "comfort goods" such as lipstick and champagne spike in times of economic trouble, appears to be holding true as the credit crunch bites and Australians prepare to face the music - and dance.

News.com.au states that while economists study inflation, unemployment and stock market trends, figures from market research firm ACNielsen appear to show the Lipstick Index is staying true to form, with sales of L'Oreal Paris lipsticks up 54 per cent year-on-year, despite a slump in consumer spending in many other areas.

Yellowglen has also seen sales of its champagne rise by 23 per cent between April 2007 and April 2008, as Australian consumers look to chase away the economic blues by breaking out the bubbly, the site adds.

Another sign of 'comfort shopping' is a rise in the sale of fake jewellery, as women in particular look to stay fashionable without blitzing their bank account.

Melinda Knight told the news service that she buys items like diamante earrings or new lipstick because they can revitalise a look in lieu of new shoes or clothes.

"I love going out and need to look good but money is tight right now - new stuff, even small things, makes me feel better," she said.

However, while Australian consumers may be happy to break out the charge or credit card for the little luxuries during a downturn, they are less likely splash out on marching up the aisle.

Weddings are down this year, the site says, mirroring trends seen during the recessions of 1976 and 1991-92, with many couples putting off their big day until they have more funds available for the perfect wedding or that dream honeymoon.

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