Co-op's funeral business hit as death rate falls
The group also said that a conscious decision to not change its prices in a competitive market had weighed on growth.
Friday 13 September 2019 17:18, UK
A surprise 10% drop in the death rate has hit the Co-operative Group's funeral business, with revenues slipping by 6% as a result.
The group also said that a conscious decision to not change its prices in a competitive market had weighed on growth.
In its financial statement, the group said: "The unexpected fall in the death rate has been a key factor in our performance," adding that holding prices in a changing market had also dragged revenues down.
Funerals fell from 53,213 this time last year to 48,423 in the first half of this year, according to the Co-operative Group's statement.
In the UK, the mortality rate steadily decreased between 2001 and 2016, according to government statistics. Since 2016, however, the death rate has fluctuated and the rate of improvement has reduced.
On what may have driven this drop in deaths, the company's chief executive Steve Murrells said: "The weather plays a part and the fluctuation in the death rate is ever thus."
Murrells went on to suggest that if the temperature dropped this winter, it could lead to a spike in deaths.
"I suspect if we do have the Beast from the East returning early next year the death rate will start to rise again", he said.
Mr Murrells said that the funeral industry was going through a "significant change", and the Co-op was now focused on "resetting our business model and making sure we're match fit for a changing market".
The company said it would concentrate on innovation, choice, flexibility and partnerships.
The mutually-owned group, which also owns supermarkets, saw pre-tax profits fall by £19m to £25m in the first half of the year, compared to the same period in 2018.
Food sales were up by 3% to £3.7bn, however, representing a significant proportion of the group's overall revenues.
According to Mr Murrells, the supermarket will stockpile products including water and toilet paper ahead of Brexit.
"If a negotiated withdrawal from the EU doesn't take place at the end of October, we expect some disruption to our supply chain", the company said in its financial results.
"We're particularly concerned about what a no-deal Brexit will mean for the British farmers", it added.
On a more philosophical note, the company said it was "mindful of how Brexit has exposed deep divisions within our communities with strong feelings of disempowerment and neglect expressed by many", adding: "These are serious matters that an economic resolution to Brexit will only partially address."