The Co-op group is slashing the cost of its funerals and promising to beat rival providers as it invests major firepower into a raging price war engulfing the sector.
In a move that promises to send shockwaves through the sector, the mutual’s funeral division is reducing the cost of its “simple funeral” by £100 to £1,895, and by a further £200 for its 4.7 million members.
The shake-up – which includes a guarantee to beat other providers’ funeral prices on a like-for-like basis – is expected to rock rivals such as Dignity, which offers a similar service for £1,995.
Robert Maclachlan, managing director of Co-op Funeralcare, said: “Funerals are becoming increasingly price sensitive and in the last two years we have seen a huge shift in the number of clients seeking affordable funeral choices.
“Our new guarantee to beat on price means that families choosing a funeral with the Co-op can be assured that they are receiving a competitively priced funeral, with no compromise on our high standards of care.”
Britain’s funeral market is dominated by Co-op Funeralcare and listed rival Dignity, which have been slugging it out for market dominance.
The Co-op holds about 16% share of the market in the UK and Dignity has around 12%.
But Dignity has come under acute pressure this year and was forced to issue a profit warning after a lower-than-expected take-up of its “no frills” funeral option, despite slashing prices.
It has also called in management consultants LEK to help lead a revamp to fight off increasing competition.
The Co-op said its measures come off the back of its recent survey of 30,000 people on death and bereavement, which revealed that as many as four million Britons suffered financial hardship after a bereavement.
They also reflect the fact that more people are selecting its most affordable funeral choices.
Mr Maclachlan added: “The fact that four million Brits have suffered financial hardship after a bereavement is startling.
“As a member-owned organisation, the changes we are making form part of a long term focus we have on leading the market to further assist the bereaved in tackling funeral affordability.”
The Co-op changes in detail:
– Co-op will lower the cost of its affordable funeral option, the Simple Funeral, from September 10.
– It will reduce in price by £100 to £1,895 plus third party costs, and £1,675 in Scotland.
– Co-op’s 4.7 million members will receive an increased discount of £200, or 5% if greater, on all of the group’s core funeral options.
– This will take the member price of a Simple Funeral to £1,695 plus third-party costs.