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Dignity issues profits warning as funeral price war intensifies
Funeral provider Dignity issued a profits warning on Friday as it said 2018 results would be slammed by a price war in the sector.
The UK's only listed provider of funeral related services said 2018 results would be "substantially below the market's current expectations", adding that it cut the price of its simple funerals by 25% and a froze the cost of traditional ceremonies.
"Consequently, the group is now embarking on a rigorous review to ensure that its funeral operations are organised to run more efficiently and effectively," it said.
"Customers are increasingly price-conscious and in an over-supplied industry, are shopping around more. This continues to have an increasing impact on the group's market share, with a significant reduction in the average number of funerals per location noted since 2015," Dignity said.
In a sign of tightening economic conditions, Britons, whose wages have lagged behind the cost of living for more than a decade exacerbated by austerity policies, are becoming more cost conscious when it comes to funerals.
A recent development has been the introduction of "direct cremations" where a person is taken from the place of death straight to the crematorium, eliminating the service.
Dignity reported an acceleration in the decline of funerals per location to 6.8% between 2015 - 2017 from 3.6% in the decade to 2014.
Dignity's simple funeral will be cut to £1,995, excluding extra costs, in England and Wales and £1,695 in Scotland.
"The group currently anticipates that as a result of changes to the pricing strategy, simple funerals may represent approximately 20% of all funerals performed in 2018," Dignity said.
"The new balance between volumes and margins will take time to become clear and the group expects to provide an initial update on these estimates and its progress when it releases its interim results in August 2018."