CMA finds mixed cost and price trends in the funeral sector

The Competition and Markets Authority (CMA) has reported mixed trends in costs and prices across the funerals sector in its third and final annual review of market outcomes.

The regulator said profitability for large funeral directors fell between 2015 and 2023, driven partly by rising costs and a shift towards lower-cost unattended funerals. Costs cited by firms included higher wages, energy bills, regulatory compliance, vehicle maintenance, and coffin prices. 

Co-op, Dignity and the National Society of Allied and Independent Funeral Directors all reported “unprecedented” or “exponential” inflationary pressures in recent years.

Crematorium operators also faced higher costs, particularly for utilities, but the CMA said profitability had remained more stable than for funeral directors. It suggested this reflected high market concentration and barriers to opening new crematoria, such as planning restrictions, which limited competition.

In the funeral director market, Co-op reported its lowest operating profit margin in the review period, partly from absorbing cost increases. Dignity also saw margins fall to a low in 2022, while Funeral Partners maintained stable margins through cost management.

On prices to consumers, the CMA found differing patterns. Some firms said funeral prices had risen in line with costs, while others reported no significant change. Co-op said average prices for its tailored and essential funerals fell in real terms between 2021 and 2023. Dignity said it had lowered prices for standard funerals and direct cremations following the CMA’s market investigation.

The regulator noted that crematorium prices had generally risen more modestly, with some operators holding prices steady during the Covid-19 pandemic. It also said the popularity of unattended funerals had increased since the pandemic, aided by marketing from direct cremation providers.

The CMA’s earlier investigation found that prices for funeral services had risen above inflation for more than a decade before 2019.