The great shift at Dignity plc

There is no doubt that the establishment of the company Pure Cremation (company website here) and its business of what they call “no-fuss” direct cremation is making an impact on the death care business in Great Britain.  Launched in 2015 as a low-cost provider of cremation services, the company is changing how some death care competitors do business.

Dignity plc, is the county’s largest death care provider with, as of July 1, 2022, 756 funeral locations across the United Kingdom.  As part of her report with the 1st Half-Year financials, Dignity plc CEO Kate Davidson made the following statement “We have continued to deliver excellent customer service whilst also implementing our new strategy as well as preparing and achieving FCA regulatory approval for new funeral plan rules, whilst recognizing the short-term adverse impact on our financial performance.”

You can view Dignity plc’s interim results for the 26-week period ending July 1, 2022, here.

In part of the “Key Points” of the half-year results, part of Dignity plc’s strategy was explained, “As explained in the 2021 Annual Report, the Company reported a potential adverse impact on underlying revenue and underlying operating profit.  this is due to a combination of factors, including fluctuations in the death rate, partnered with a change in our pricing strategy and introduction of a direct cremation service through our funeral network”.

In relation to that strategy, here is what CEO Davidson said in her half-year executive summary, “Growth in our funeral market share is signaling positive signs that our new strategy is beginning to deliver, especially considering that it comes as we have been rationalizing the branch network and closing unviable branches.  A significant change in our approach to pricing and product mix at the end of 2021 has resulted in a reported operating loss of US$ 53.3 million (for the 26 week period ended July 1, 2022) as compared to an operating profit of US$ 45.2 million (for the same period in 2021). . . . . Lower prices to give increased competitiveness and an investment in all elements of our proposition do lower profitability until such time as growth with operational gearing compensates. ”  

Related:  Funeralcare provider’s husband and wife team eye $400 million (plus) windfall.  Sky News (Great Britain)

Funeral Director Daily take:  I think Dignity plc’s change of strategies should be one of the most watched stories in death care this year.  For years Dignity plc has operated the United Kingdom’s most traditional style death care facilities.  In addition, much like Service Corporation International in North America, they have been seen as the suitor of choice for firms that are interested in moving their succession out of the family.

Tom Anderson
Funeral Director Daily

From the public’s perspective, however, Dignity plc has heard much about the high cost of funeral and cremation services.

I think it was that perceived high retail cost of death care that was one of the reasons that Pure Cremation was able to establish such a beachhead with what we now know as “Direct Cremation”.  Or simply, cremation without extended services.

Quite frankly, it appears to me that Pure Cremation has been so successful that Dignity plc has had to react to the lower price point with lowering their own rates.  And, at least to this point, in looking at the July 2022 1st-half results, it appears that Dignity might struggle with being profitable with those lower price points.

If you watch the trends like I do, this scenario could possibly play its way out in North America also.  While there is no provider that garners the Pure Cremation market share in North America, there is no shortage of companies trying to do so in the online, low-price, direct cremation marketplace.  Couple that fact with the idea that there are less offered services being chosen and a higher propensity of people looking for “green” or ecological choices moving forward and you can see where traditional funeral homes, with their high overhead, may be facing headwinds in the future.

North America does have a growing and growing number of deaths anticipated moving forward and that may counter the number of dispositions being lost to direct cremation and green alternatives for the traditional funeral homes, but it may all depend on how fast the shift in disposition choice comes along, if it comes along.

No doubt. . .there is a lot of variables in the market place, but a good operator will be planning for all of them.

More news from the world of Death Care:

Enter your e-mail below to join the 2,909 others who receive Funeral Director Daily articles daily:


Print Friendly, PDF & Email
Posted in ,

Funeral Director Daily

Leave a Comment

Subscribe to Funeral Director Daily
Enter your email address to join 3,182 readers who subscribe to all Funeral Director articles.

advertise here banner