There has been some indications, and a lot of hope, that the inflation that we have is starting to subside.  While we are now in the 3rd Quarter of 2022, Wal-Mart recently posted their results for the 2nd Quarter of the year.

To be honest, Wal-Mart’s profit reached $5.15 billion for the quarter which beat last year’s 2nd Quarter (pre-inflation) of $4.27 billion.  However, as Wal-Mart explained the way it was done makes me wonder what might be happening in the death care business. Here’s one writer’s explanation of how Wal-Mart reached these profits as mentioned in this article, “. . .higher income Americans turned to Walmart to cut costs on groceries while its lower income customers swapped out deli meats for less expensive hot dogs and canned tuna.”

The end result for Wal-Mart was more customers because they thought they could stretch the value of their dollar.  And, some of these customers came from the pricey, luxurious grocery stores to Wal-Mart.

Let’s assume that presumption is true.  Does that give us any indication of what the American consumer will do when it comes to death care choices in an increasing-priced society?  For instance, will the traditional earth burial family still purchase a premium casket and vault which now costs more because of the inflation or will they lower their selections to a 20-gauge casket and concrete burial liner to keep the costs within their perceived funeral budget?

I’m not so sure that we can answer those questions but they do bring up one facet of how inflation might be affecting our businesses.  Not only are we seeing cost increases in almost all of our necessary overhead expenses, but we may see more modest, and less margin, selections by the consumer in the selection room.  In essence, that’s a “double whammy” of lower revenues and higher costs — not a great recipe for success.

And, that presumes that consumers don’t alter their disposition method to save money.  I’m one who is pretty adamant about the method of disposition for me — I prefer traditional earth burial.  But, I’m also guessing that their are others who are not as adamant as I am. . . . and if the cost of their preferred method goes up more than they prefer to pay, will they opt for a less expensive method?  Say, cremation instead of earth burial or direct cremation with no services instead of cremation with services?

Wal-Mart says in the article that they were “caught off guard by how quickly its customers pivoted” to less expensive products once they saw price increases.  I think a “pivot” of more affluent shoppers going from Whole Foods to Wal-Mart for groceries is a big pivot.  However, from my point of view, these are rather inexpensive recurring purchases and the consumer can maybe live without their “top choice” for a while.  The difference that I see is that the selection of funeral rites and methods is a one-time selection that I don’t see consumers pivoting on without a great deal of thought.

Tom Anderson
Funeral Director Daily

In one of our articles earlier this week, one of the public company CEO’s mentioned how deliberate they are in raising prices.  With the risk of losing some margins because of elevated expenses, maybe he is right to be that deliberate and not put your consumer families in the situation where they may change their long-held thoughts on funeral wishes because of rapid price increases.

Keeping family traditions at higher priced margin services could be real helpful moving forward.  For what it is worth, during my funeral director tenure I experienced families that had great reluctance to cremation and were torn about trying that method of disposition.  However, it seemed that once the method was tried, it was suddenly okay for other family members to go that route and the entire family became cremation customers rather than earth burial customers.

Over time, that first cremation client in a family not only cost lost revenue and dollar margins on that death call case, but caused an erosion in family expenditures on death care into the next generation.  In my opinion, every service we can hold as traditional or as a cremation with services, not only helps our bottom line today but going into the future also.

I’ve always been one who “measured twice (or maybe three times) before making the one cut”.  Maybe it is the appropriate time to be really measured in our pricing so as not to move our consumer families from a high dollar margin service to a lower one.

More news from the world of Death Care:

• Going “green” at local burial ground.  The Day (CT)
• Most Americans today are choosing cremation – here’s why burials are becoming less common.  Religious News Service
• Funeral plan customers set to lose thousands as firm goes bust with huge debts.  The Mirror (Great Britain)
• Two from Oakland County appointed to state mortuary board.  The Oakland Press (MI)
• Millbury’s Mulhane Home for Funerals marks 150th anniversary.  Millbury-Sutton Chronicle (MA)
• Mulhane Home for Funerals website

Enter your e-mail below to join the 2,822 others who receive Funeral Director Daily articles daily: