UK spending data reflects the ‘lipstick effect’

The landscape: UK consumers are splurging on affordable luxuries at a time when economic storm clouds loom on the horizon as the new Labour government prepares its plan to get the country’s fiscal house in order.

The situation reflects the phenomenon Estée Lauder heir Leonard Lauder dubbed “the lipstick effect” to describe how consumers often spend on small luxuries to lift their moods at times of economic crisis.

The data:

• UK consumer spending on high-end perfumes jumped 6.9% year over year (YoY) in August, while spending on less pricey options fell 2.9% YoY, per Adobe Digital Insights.