Above inflation and sausages: funeral services continue to rise rapidly in Russia

Ekaterina Maximova

According to Rosstat, in May, the turnover of the funeral services market in the whole of the Russian Federation amounted to 8.087 billion (+3.7% compared to the previous month).

Novye Izvestia listed the regions in which a sharp increase in funeral services costs was recorded by the end of the first quarter of 2023.

In May, the «explosion» of statistics was demonstrated by several other subjects of the country. Among them are the Kabardino-Balkarian Republic, which showed an increase of 28,5% by April 2023 (or 88,8% by May 2022), Tomsk Region (+25.3%), Kurgan Region (23.4%), KhMAO (+21.8%) and Perm Krai (+21.2%).

If we take only the central part of Russia, then in the Central Federal District the total market turnover for May amounted to 2.5 billion rubles (+3.8% by April). In annual terms, the Ivanovo Region is leading (+17.3% by May 2022), Moscow and Tver region (+14.4% and 14,9%, respectively), as well as Moscow (+11%). The physical volume index for the month — in May compared to April 2023 — was increased by the Moscow Region (11.1%), Kaluga Region (5.7%), Moscow (4.5%), Ivanovo Region (2.8%).

In the NWFD, the total turnover for May amounted to 1.3 billion rubles (+4.9%). And St. Petersburg (+10.3%), the Leningrad Region (+8%) and the Komi Republic (+4%) were among the «leaders» in terms of market turnover.

The turnover of the funeral services market has been growing rapidly since 2020. At first, the most record-breaking since 2013 was the pandemic year 2021, when the annual turnover reached 80.4 billion rubles (+12.5%). By the end of 2022, the revenue of funeral companies increased to 86 billion rubles. And this, apparently, is not the limit.

From January 2022 to April 2023, the average cost of funeral services in the domestic market of Russia increased by an average of 30-50%, <url> reported.

Only the average cost of cremation (package offer, including rent of the funeral hall) for the year rose by 37% (from 22.3 thousand rubles to 30.5 thousand rubles). Coffins have also increased in price (+38%) and other goods and services that cannot be dispensed with during funerals.

And if in 2022 the most minimal package for burial was estimated at about 20 thousand rubles (excluding Moscow, where the minimum costs are about 35 thousand rubles), then by the end of 2023, funerals in the most economy class will rise in price to 30.8 thousand rubles.

The Wild West never dreamed of

Mikhail Limonad, Professor, leading lecturer at the RGUTiS Funeral Services Training Center, notes that the funeral market has always been particularly criminal and uncontrolled. The state, he adds, «has thrown this industry into the bosom of an unregulated market in which the wars of the „wild West“ are taking place. And where the colossal money is spinning.

But, he notes, the current rise in the cost of services is quite understandable: the costs of energy resources and materials are growing.

«The same cremation is generally a production process, the cost of which consists of the cremation installation itself and maintaining its condition. Has the state invested at least one penny in this area? No. And the same crematorium workers should receive an increase in wages, taking into account inflation? Must. They have a very difficult job. Taking into account the sanctions and the changing situation in the economy, there is now, for example, a problem with the import substitution of stone for the manufacture of monuments. We have practically no good stone of our own. It is transported from China. The stone-cutting activity is experiencing sufficient difficulties, including with transportation, that is, the costs of delivery and processing are sharply increasing. The constituent elements have soared in price and in total give an increase in costs. If, again, we take cremation by one check, then there may be 20 positions,» says Mikhail Lemonade.

Elena Andreeva, Executive Director of the Union of Funeral Organizations and Crematoriums, does not agree with the statement that morticians massively and at once increase the cost of their services. And emphasizes that the organization of funerals is a comprehensive service.

«The consumer request may be different. You can organize a funeral for 50 thousand rubles, or you can not keep up with a million. Yes, there was a rise in prices when there was a rise in the price of wood and metal, that is, basic purchasing products. But it is impossible to say that the same cremation has sharply risen in price. In some region, this service costs 9 thousand rubles, somewhere 15 thousand. Somewhere it is provided immediately by the package, including transport and hall rental. In general, of course, yes, there is an increase in value, because inflation, business pays taxes. But to say that massively and sharply everything has risen in price is not so,» says Elena Andreeva.

The executive director of the Union of Funeral Organizations and Crematoriums also adds that the players of the funeral services market in the conditions of the deteriorating economic situation (people no longer have money) react to consumer demand.

«They offer economically more profitable services instead of expensive ones, but at the same time aesthetics does not go away. An alternative immediately appears, it is a very flexible market,» Andreeva summed up.

Recall that in May in Russia has broken the record for mortality. The number of deaths, according to Rosstat, increased by 3,9% year-on-year. In May, 152.7 thousand people died in the country — this is 5.7 thousand (or 3,9%) more than in the same month a year earlier.

The increase in mortality in May occurred in 67 regions of the country. The largest increase in the number of deaths was recorded in Ingushetia (plus 26,4%), Kurgan region (plus 16,8%), Buryatia (plus 14,7%), as well as Kaliningrad and Orenburg regions (plus 13.8 and 13,1%, respectively). The leaders in reducing the indicator were Kalmykia (minus 15,8%) and Kamchatka Krai (minus 7,6%).