Funeral home bankruptcies are occurring one after another across the country. The reality is that local funeral homes are going bust across the board. The proportion of elderly people in the total population has been steadily increasing since 1950 (4.9%), reaching 10% in 1985, exceeding 20% in 2005, and reaching a record high of 29.1% in 2023. According to vital statistics, the population aged 65 and over is 35.89 million. Despite the aging population and rising death toll, the reason for the successive bankruptcies of funeral homes is simply the "lower cost of funerals."
Even as the number of funerals increases, the "unit price" of funerals has fallen, leading to declining sales and bankruptcies. As simplification of funerals has become mainstream, the lavish funerals of the past are on the decline. Contributing factors include the increase in "family funerals," which invite only close relatives, and the rise in "direct cremations," where the body is cremated immediately without a funeral, even according to the wishes of the deceased. The average funeral cost is around 2 million yen, but in the Tokyo metropolitan area, the average cost for a family funeral is less than 1 million yen. In particular, in urban areas of the Kanto region, where cemeteries are expensive, the proportion of people choosing "direct cremation" without a funeral at all is increasing. Next, within the total cost, there's the question of whether to spend money on the funeral or on purchasing a grave. In fact, there's a tendency to prioritize graves over funerals.
As competition in the funeral industry intensifies and funeral prices fall, there's a scramble for funerals, and it could be said that the funeral industry has already entered a price war. On online funeral cost comparison sites, funeral homes advertise "low prices" and compete for customers. Funeral homes are forced to pay significant fees to portal site operators, making it even more difficult for them to turn a profit. This challenging situation is expected to continue, and we may see an acceleration in funeral home M&A.
The COVID-19 pandemic has led to the widespread adoption of drastically scaled-down funerals, often as a private funeral service, or even forgoing them entirely, as a justification for the practice. This trend has further impacted the funeral industry as a whole. Large-scale funerals have already placed a heavy burden on bereaved families, both financially and emotionally, so the arrival of the coronavirus pandemic may have acted as a lifeline.
Mobile funeral vehicles with transformable storage areas have appeared, and services have emerged that allow funerals to be held anywhere in the country. However, these services are primarily targeted at rural areas where funeral costs are low, and they do not appear to have gained widespread adoption.
Funerals and wakes have traditionally been held to inform acquaintances and relatives of the deceased's passing. Social media platforms like Facebook and Instagram offer free "memorial accounts." A "memorial account" is a service that allows bereaved family and friends to share memories of the deceased's social media accounts. This allows people to share time remembering the deceased. With the recent increase in memorial accounts, funerals may become less common and it may become more common to use these social media services to announce the passing of someone.
Reference: Facebook Request a memorialization or delete your account
https://www.facebook.com/help/1111566045566400
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