Slow growth in per capita income and the popularity of cremations will limit growth
New York, NY (PRWEB) December 31, 2013
In 2013, the Funeral Homes industry is expected to record a revenue increase from the previous year. Over the past five years, revenue has grown, led by increasing revenue from merchandise sales and greater customization offerings. However, the recession did take its toll on the industry, with revenue falling during 2009 as a result of lower consumer disposable income and rising demand for inexpensive cremations. According to the latest data from the Cremation Association of North America (CANA), an estimated 43.2% of deceased persons were cremated in 2012, compared with 36.0% in 2008. Additionally, during the recession, cash-strapped families turned to discount retailers and manufacturers to purchase caskets, which further depressed revenue for funeral home operators.
Average industry margins increased slightly over the past five years, rising a noteworthy amount in the five years to 2013. During the period, the price of funeral and cemetery services increased and given the high mark-ups associated with funeral home merchandise, such as caskets, profit margins remain relatively high compared to many other industries. Over the past five years, the size of the industry has also expanded slowly, with the number of funeral home operators increasing over this five-year period. Additionally, market share concentration in the Funeral Homes industry is low, with the top four companies (including Service Corporation International and Carriage Services Inc.) accounting for less than 13.0% of revenue in 2013 (see IBISWorld report 81221 for major player market shares).
According to IBISWorld Industry Analyst Sally Lerman, “Conditions are projected to improve slightly through 2018.” As the population continues to age, the number of deaths in the United States is anticipated to increase. Still, revenue gains are forecast to be moderate for funeral homes as inexpensive cremations become more popular. The latest available data from the CANA projects that 58.9% of all consumers will choose cremations over burials by 2025 compared to a current 43.2%. Consequently, “industry revenue is projected to expand over the next five years,” says Lerman. However, the industry's future growth prospects will be hampered due to rising competition from crematories, which are excluded from this industry, and the low revenue and profit that cremations generate for funeral homes.
For more information, visit IBISWorld’s Funeral Homes Industry in the US industry report page.
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IBISWorld industry Report Key Topics
The Funeral Homes industry includes companies that conduct funerals and prepare the dead for burial or interment. Industry establishments organize wakes, transport the dead and sell caskets and related merchandise. This industry includes funeral homes combined with crematories however; establishments that primarily conduct cremation are excluded from this industry and are included in the Cemetery Services industry (IBISWorld report 81222).
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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