The recession and a preference for low-cost cremations hampered revenue growth
Los Angeles, CA (PRWEB) July 29, 2012
The Cemetery Services industry has had to dig itself out of its recessionary woes over the past five years. With decreased disposable income, families were less willing to purchase high-value merchandise and burial services and, instead, opted for cremations, which generate significantly less revenue for cemetery operators. As a result, over the five years to 2012, industry revenue contracted at an average annual rate of 2.1% to an estimated $3.4 billion. However, according to IBISWorld industry analyst Caitlin Moldvay “With improving economic conditions, families have become less price conscious and revenue has been on the upturn. In 2012, industry revenue is expected to increase 2.1%.
The Cemetery Services industry has a low degree of market share concentration. In 2012, the top four companies in the industry generated only a small portion of industry revenue combined. The majority of the industry's companies are small and operate just one cemetery or crematory. Most cemeteries serving customers that living within a 10-to 15- mile radius of the property's location. Over the past five years, the number of operators in the Cemetery Services industry has decreased due to the tough economic climate. “Although adverse economic conditions led some firms to exit, heightened merger and acquisition activity also contributed to industry consolidation” says Moldvay. Over the five-year period, major companies such as Service Corporation and StoneMor Partners increasingly acquired competitors, which resulted in market share concentration among the top four companies to rise. The most prominent acquisition occurred when Service Corporation acquired Keystone North America, previously a top operator of funeral homes and cemeteries.
Over the five years to 2017, industry revenue is expected to increase. Favorable trends in per capita disposable income are expected to result in more sales of value-added products, which will aid profit margin growth over the five-year period, reaching 8.8% of industry revenue in 2012. Furthermore, an increasing share of the population will enter the upper age bracket, which will increase sales of both advanced and as-needed services. Over the period, cremations are expected to become increasingly popular; according to the Cremation Association of North America, a signifantly more individuals are expected to cremation in 2015, that they did in 2010, according to the latest available data. Since cremations generate less revenue for the industry compared with burials, this trend will moderate revenue gains over the five-year period.
For more information, visit IBISWorld’s Cemetery Services in the US industry report page.
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IBISWorld industry Report Key Topics
The industry includes establishments that operate sites or structures reserved for the interment of human or animal remains. The industry also includes companies that offer cremation services. This industry does not include funeral homes, nor does it include funeral homes that operate cemeteries. These companies are included in the Funeral Homes industry (IBISWorld report 81221).
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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