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NOVEMBER 2014
FUNERAL HOME & CEMETERY NEWS
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higher prices. A few thousand funeral homes have gone un-
der or merged in the past 5-10 years, though, so the absolute
rooftop numbers are slightly lower on average.
Q: Should there be some regulation for funeral homes not meet-
ing these criteria?
REPLY: I don’t even understand this question. Are you hon-
estly assuming that this chart means that we think the gov-
ernment ought to cap the number of funeral homes? Do you
“really” think we’re that ridiculous, Steve?
REBUTTAL: Be serious Josh. In 2005 FCA filed a lawsuit in
federal court in California against Service Corporation Inter-
national, Alderwoods, Stewart Enterprises and Batesville Cas-
ket Company accusing them of shutting out competition and
fixing casket prices. FCA lives on getting unknowing legisla-
tors to file bills to have funeral service licensees and locations
practice as FCA sees fit. If you could, I believe you would.
Q: Don’t you think the market can take care of itself?
REPLY: Yes, if the state funeral boards and legislators would
stop enacting anti-free-market regulations designed to pro-
tect full service funeral homes under the guise of “consumer
safety.” A great example is your own state of Arizona, which
relegates crematory operators to dealing only with full service
funeral homes and prohibits them from serving the public di-
rectly. No one has yet explained how that’s necessary and why
Arizona is so different from other states that lack this prohibi-
tion and have thriving direct-cremation businesses.
REBUTTAL: Josh, this is where we will always disagree. The
market does take care of itself. These funeral homes exist,
study after study, because enough families want them to ex-
ist. The vast majority isn’t agreeing with FCA’s philosophy of
what a final care disposition firm should be. They want the
funeral director that they know to be there for them when
they need their services. If this were not true, your magic for-
mula would have been achieved years ago.
“Consumers are always in control of any situation...no mat-
ter what the purchase is...they carry the power of the word
NO!!!!”
–Brian Miller
(comment left on FCA’s website regarding survey)
ns
“For me, I think that I don’t like feeling pressure from out-
side sources. I’d rather put the pressure on myself and push
myself to do it as good as I can.”
–Jay Hernandez, actor
When you hear the voice of pundits telling you in detail
what you are doing wrong and how you must redesign your
business, I remember a quote from Mark Twain, “The public
is the only critic whose opinion is worth anything at all.”
These thoughts came to me as I was looking over Funeral
Consumer Alliance’s most recent funeral home survey enti-
tled “An Oversaturated Market 2014”. Every few years FCA
looks at the number of funeral homes in a state, the number
of deaths within it and the number of funeral homes serv-
ing those deaths. Through their own deduction of what an
average funeral home should do in a week, they make their
recommendations on how many funeral homes should serve
that state. Their verdict, which should surprise no one, is that
there are way too many funeral homes in America, therefore
charging inflated prices.
This survey has always confounded me as to its purpose and the
formula for its conclusions. I finally had to contact Funeral Con-
sumer Alliance’s Executive Director
Josh Slocum
to comment.
Slocum’s formula for the number of funeral homes needed
is based on one funeral per day, five days a week, fifty weeks a
year (he is kind enough to give us two weeks off per year).
In the Northeast, New Hampshire has 90 funeral homes
yet needs only 41; Massachusetts has 519 funeral homes, yet
needs only 210; New Jersey with 660 funeral homes needs
only 278 and New York with 1579 funeral homes needs only
586. In the South, Florida has 831 funeral homes yet needs
only 695; Alabama with 407 funeral homes needs only 192;
Georgia with 572 funeral homes needs only 285.
In the more Central part of the country, Illinois has 1027
funeral homes yet needs only 400, Iowa with 397 funer-
al homes needs only 111, and Wisconsin with 496 funeral
homes needs only 189.
The Western part of the United States is underserved, ac-
cording to the FCA formula. California has 806 funeral
homes, yet needs 936; Arizona has 144 yet needs 187 and
Nevada has 52 funeral homes yet needs 78. Texas and Col-
orado fall back in the over-served column with the Lone
Star state having 1128 funeral homes needing only 666; the
Rocky Mountain state having 182 funeral homes with only
126 needed. Please contact me for the entire survey or you
can also find it on FCA’s website.
Q: Josh, In your chart of “An Oversaturated Market 2014”,
you come up with a formula for how many funeral homes
should exist. I don’t understand the one funeral a day, Mon-
day through Friday, etc. Is this what you think a funeral home
should be doing without “abusive mark-ups”?
REPLY: No, we don’t think that funerals are going to happen
Monday through Friday, obviously. This is a
model
, an approx-
imation. It cannot capture the actual variations, and we don’t
even imply that we think funeral service could operate that way.
As a general rule of thumb, however, it does bear out. We
do, in point of fact, find that funerals
on average
cost more
when there are “too many” firms competing for too few calls.
This isn’t an ideological position, it’s simple arithmetic that
derives from the fact that there is a limited number of cus-
tomers per population. More funeral homes per population
necessarily means fewer calls all around “on average.” But it
doesn’t mean funeral home costs and expenses go down. They
remain. So how to pay the bills? Prices have to be higher.
REBUTTAL: Josh, in any business scenario, when there is
competition, someone will introduce lower prices. If anoth-
er firm survives that, it is proving itself to be the Starbucks
or the Nordstrom’s of their area.
Q: What about firms doing almost all cremations versus the
firm doing almost all burials after visitations?
REPLY: We find that those firms are usually operating on a
far more sensible high-volume model anyway. Take a look
at storefront cremation-only or arrangements-office-only
firms and their prices. You’ll notice they’re usually on the
lower end. High volume is what makes this possible.
Q: What about the large firms such as Frank E. Campbell do-
ing ample business but being very expensive?
REPLY: Steve, I’m not sure why you’re asking this, since I
know that you know Campbell is owned by SCI, and that
you know it’s a prestige firm that can command the price it’s
asking merely based on its name and the fact that it’s buried
so many celebrities.
REBUTTAL: Josh, what you don’t understand is that a lot of
communities have their own “Frank E. Campbell’s” – funeral
homes that provide prestige service that families will and do
pay extra for.
Q: How has 2014 compared with your past studies?
REPLY: I haven’t compared them line by line, but the trend
is still the same: more funeral homes per capita, generally
Sundale Research’s
New Report Identifies
Trends in the Funeral and
Cremation Industry
BAY SHORE,NY—
SundaleResearch
is excited to announce
the release of its 2014 State of the Industry report, “Funeral
and Cremation Services and Supplies in the United States.”
The 9th edition of their Funeral and Cremation Services and
Supplies Industry report, published annually, contains time-
ly and accurate industry statistics, forecasts, and objective
analysis. The report, published in September, features his-
torical, current, and future trends covering the 2000-2018
period. It is an essential resource for the funeral and crema-
tion industry covering the most important trends for the
busy executive, including detailed data on revenues and es-
tablishments; death, burial, and cremation rates; shipments
of funeral and cremation supplies; and expenditures by de-
mographic groups. Utilizing various sources and primary re-
search, the report also analyzes new developments shaping
the industry, such as the soaring popularity of cremations,
personalization trends, and pet funerals and cremations.
Sundale Research, based in Bay Shore, NY, has been close-
ly following industry trends, forecasting data, and writing
State of the Industry reports for more than 17 years. They
dedicate a small team of analysts to a related group of re-
ports to ensure the most accurate statistics, forecasts, and
analysis to help you make the best business decisions. Their
State of the Industry reports are intended to save you time
and money while providing the most accurate informa-
tion about your industry. Because their analysts are focused
on a core group of studies, they can efficiently produce re-
ports and pass the savings along. This also results in a deep