A recent survey found “mixed cost and price trends in the funeral sector”.  The survey conducted by the Competition and Markets Authority (CMA) of Great Britain probably has some correlation with the same trends happening in the USA.

The regulatory authority (CMA) concluded that profitability for large funeral directors fell between 2015 and 2023. . .driven by rising costs and a shift towards lower-cost unattended funerals or what we would call in the U.S. “Direct Cremations with No Services”.

The “rising costs” most often cited were higher wages, energy bills, regulatory compliance, and vehicle maintenance.

The CMA has the ability to pull information from the companies that it regulates and I found it interesting that as to prices to consumers they found four main and differing patterns by funeral homes:

• Some firms had raised prices in line with their increased costs.
• Some firms reported no significant change in their prices.   (They absorbed the price increases)
• Co-op Funerals reported that their average prices fell in “real terms” to consumers
• Dignity Funeral reported that they had lowered their prices for standard funerals and direct cremations

The CMA also mentioned that prior to these pricing situations, prices to consumers had risen above inflation for more than a decade.

Co-op, Dignity, and the National Society of Allied and Independent Funeral Directors all reported to the CMA that there were “unprecedented” or “exponential” inflationary pressures in recent years.

Tom Anderson
Funeral Director Daily

Funeral Director Daily take:  There is nothing surprising about this report.  As has been widely reported across the United States, whether you need to buy eggs or you need to buy a new truck — prices have increased.

One observation that I’ve had in my lifetime is that once prices increase, with the exception of widely traded commodities, the prices are not coming down.  If you have raised wages from $12 an hour to $15 an hour, you will never be able to go back to the $12 rate again.  That’s why when we let inflation into the economy. . . it takes hold.

It’s the same in the funeral or cremation business.  When wages or property taxes or supplies go up in cost  —  they are not coming back down.  Owners and managers need to understand that.

I’ve really noticed these price increases in fast food restaurants.  Those type of rising wages and increased costs have came to the fast-food business and you will never see your McDonald’s Quarter Pounder at $4 again.  What is of some relevance about fast food and grocery prices rising is that your death care clients see them everyday also.  While a funeral home or cremation provider or cemetery has to be judicious about price increases and their potential ability to chase away customers or move them to lower services — your clientele knows that your expenses have gone up.

If that is the case, you can absorb costs for awhile but, at some point in time prices to consumers need to be increased or you have to supplant those margins with more business.

And, in the funeral home business, price increases can be even more tricky and complicated because of the ability of consumers to choose lower priced services such as direct cremation.  I recently read an article where a funeral home executive mentioned that if he chooses to have a 3% retail price increase across the board, it nets out at about 2% because of the increased choice of cremation or other lower cost services chosen.

So, be aware.  There continues to be an argument in the U.S. as to whether inflation is “under control”.  Until we know it is your costs are continuing to rise — make sure that you understand that and price accordingly.

Inflation related articles from last week:

More news from the world of Death Care:

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