Posted: September 3, 2010

By Bill Cresenzo

bill.cresenzo@insidebiz.com

Just like every other sector in the United States, the business of death has taken a hit since the economic meltdown.

The National Funeral Directors Association reports that people are choosing less expensive caskets, cremations are increasing and funeral services are smaller and less elaborate.

Funeral homes themselves are trimming back. For example, a new funeral home in Hampton Roads doesn't even own its own hearse, renting one instead to save money.

And another, more subtle shift is taking place, two local funeral home directors said.

Funeral homes have been one of the last public vestiges of racial separation.

In some circles in some cities, funeral homes are known as "black" or "white" with primarily one race of clients.

Carlos Howard and Kevin Sanderlin, both African Americans who own funeral homes in Hampton Roads, said that while they have served a number of Caucasian families throughout their careers, that number has noticeably increased, spurred by the faltering economy.

"The industry for years was predominantly driven by race, but now it's being driven by cost," said Howard, owner of Carlos A. Howard Funeral Home in Norfolk. "It's one of the largest expenses you can have, along with a house and car. You see people shopping around because the pricing around here is just crazy. The bottom line is the value, price and service - and if you can get something for $100 rather than $1,000, you are going to buy it."

Howard credits the Internet for allowing people to shop and compare. Many funeral homes, including Howard's, list their prices online.

Sanderlin, owner of Beach Funeral and Cremation Services, said the funeral home used to be called P.G. Thommasson Funeral Services. Sanderlin was its manager and became part-owner in 2004. The name was changed to Beach Funeral and Creamation Services shortly afterward.

"We are one of only two black funeral homes in Virginia Beach," he said. "You are now running into people where it's not a black or white thing. It's about what is coming out of their pocketbooks.

"We are seeing an increase of whites coming to us because of the amount some of the white funeral homes are charging," he said. "People are starting to shop around. You get people who are saying, 'I am not going to spend all my money at the funeral home,' and I don't blame them."

A report compiled by the nonprofit Funeral Consumers Alliance of Tidewater illustrates the vast price differences among funeral homes in South Hampton Roads.

According to the report, there are 30 funeral homes in Hampton Roads, several with multiple locations.

The association says Howard's funeral home charges the least for basic services, which is, in essence, an administrative fee people pay in addition to embalming, caskets, visitation and a funeral service. Howard charges $927.

"The public is saving money in cremation," said Louis B. Jones, president of Holloman-Brown Funeral Home and Crematory, which has locations throughout South Hampton Roads. "They don't have to pay for a grave site, they don't have to pay for a grave opening, they're not having to buy a marker for the grave."

Christopher Wilson, manager of Hale Funeral Home in Norfolk, said that many are scaling back on funerals because of lack of funeral insurance.

"People are cutting back," he said. "Most people nowadays don't have the insurance they used to have, and cremation is becoming more prevalent. Back in the day, most people had insurance, and they didn't have to worry about [funeral expenses] coming out of pocket. It's putting people in a bind."

In turn, funeral homes are seeing their profits drop, so they are making adjustments.

One of the newer entries into the Hampton Roads funeral industry is Family Choice Funerals. Operated by Steve Zittle, the decidedly no-frills funeral service opened a funeral home in April in Virginia Beach.

"The plans had been in place, and it just so happened that when [the economy crashed], this thing got off the ground," Zittle said. "The traditional model that funeral homes have been operating under just doesn't work anymore. We decided we were going to do things differently."

When Zittle needs a hearse, he rents one from a larger funeral home, rather than paying $95,000 for a new one.

Instead of constructing a new building with a mammoth chapel - "the mansion on the hill, is what I like to call it" - he renovated a smaller one on Indian River Road.

He doesn't have a secretary. All his business is conducted on his computer and Blackberry. While families can certainly come to the funeral home to make arrangements, he likes to go to them.

"We can do everything we do at the funeral home in their homes and this saves on personnel," he said.

Add to that the fact that most people don't want to spend time at the funeral home making arrangements while they are grieving. Both he and Howard say that the Internet and technology have made making funeral preparations easier for both the families and the funeral homes.

"I have 10 children," he said. "If something happened, I can't imagine dragging them into the funeral home for three hours." nib