Cost of Burial Continues to Grow

The United States Department of Labor published rates on the rising cost of death as their October 31 piece in the Economics Daily platform.  From here you can see the full article with a graph which indicates some of the following:

  • From December 1986 to September 2017 funeral expenses rose 227.1%
  • In that same time period, all other items in the CPI rose 123.4%
  • Caskets rose in that time period 230%
  • Commodity pricing was less linear and rose a total of 95.1% during that same time period

Funeral Director take:  It’s interesting to note that this is the price for funerals and caskets and not for death care services in general. If that is truly the case it does probably reflect that funeral services and caskets are going up at that high a rate to compensate for the number of death calls that end up as memorial service cremation or direct cremation.

Obviously, if you want to maintain an average call price, and your cremation percentage or low cost rate percentage is rising, then you do have to raise the price on higher end services to make up for that difference.  I’m of the opinion that is what this graph and numbers show.

I would guess if they had a statistic that was total service revenues divided by the number of deaths, then that line would be flattening out or would actually start going downward.  That statistic would be indicative of the amount of money spent on death care per death and probably, if not yet – then soon, would show a much different percentage growth number – especially since we had such a low, in comparative terms, cremation rate in 1986.

It is interesting, however, that in this time period the price of funeral services and caskets rose at more than double the rate of commodities and almost double that of the CPI.  I think that is indicative of funeral home business people finding the learning curve on cremation services.  For many of us – as cremation started its slow rise in popularity – we were scared of what it would do to revenues.  What did we do?  We raised funeral price to make up for the cremation dollar shortfall.  Then going to Business Economics 101 — what happens when you raise prices?  You price more people out which moves them to limited services and the circle continues.  In retrospect, raising funeral pricing was probably the worst possible thing a funeral home could do.

I think now, however, we have turned the corner as a profession.  Many of us no longer are scared of cremation and its lower price points — we are embracing it and finding ways to earn more off what each family wants with the services.  As a matter of fact, we at Funeral Director Daily have done articles that point out that we believe some firms may be targeting low-cost cremation providers as acquisitions with the intent of using their knowledge in sales and merchandising to raise the dollar volume per case through elected add-on products of the consumer.  Nobody thought of that in the 1980’s.

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