For over 70 years, Federated Funeral Directors of America has been compiling statistical averages that reflect the operating results of its funeral director clients. The figures for 2013 are based upon an analysis of more than 200,000 services conducted by nearly 1,400 firms. They are located in 43 states and range in size from small rural concerns to large urban operations conducting over 1,000 services annually.
According to Federated, “The average cost of operation (overhead) declined by 0.73% during 2013. This is the first time since Federated began keeping records (in the mid 1940’s) that there has been a year-to-year decrease in the operation cost. (Following record small increases in 2011 and 2012, this marks an unprecedented period of cost containment.) At the same time, the average selling price of a ‘regular adult funeral’ rose by 1.66% (low by historical standards, but a three-year high nevertheless.) Consequently, as a percent of sales, funeral profits improved to 7.96% from 6.12% last year and from the all-time low of 5.31% in 2009.”
Federated analyzed the 20-year trend noted in the chart below: “Over the last 10 years, the selling price of a Regular Adult Funeral rose at an average annualized rate of about 2.3%. This was slightly higher than the typical firm’s increase in operation cost, which climbed by an annualized average of 2.2%. These factors, along with lower casket values, produced an average profit to adult sales ratio of 7.96%, up from 7.03% in 2003. While significant progress has been made, profitability still lags behind the early 1990’s.”