Death in the Funeral Business

July 19, 1992

Mortuaries, the saying goes, are a recession-proof business. Indeed, the $6 billion-a-year funeral industry is so lucrative that huge chains are increasingly taking over independent funeral homes and cemeteries.

Stewart Enterprises Inc., a New Orleans-based company that bills itself as the "third-largest provider of cemetery and funeral services," has been particularly active in recent months in extending its reach to Maryland. Stewart has signed a letter of intent to buy two of metropolitan Baltimore's largest cemeteries, Loudon Park and Druid Ridge. It also is acquiring Hillcrest Memorial Cemetery in Annapolis. The company already owns Cedar Hill Cemetery off Ritchie Highway, Crestlawn Memorial Gardens in Marriottsville and one in Bladensburg.

The 250-acre Loudon Park Cemetery is the resting place of H. L. Mencken and 200,000 other Baltimoreans. (A huge national cemetery adjoins it, but was not part of the transaction.) The 220-acre Druid Ridge Cemetery in Pikesville also contains the graves of many notables. Chain operations "seem to be the wave of the future in our industry," said a Stewart official.

The nation's funeral industry comprises 23,000 mortuaries and thousands of cemeteries. It has long been considered one of the least competitive of America's businesses. All that is now changing. Family-owned funeral homes are facing competition from no-frills cremation services. Profits also have been hurt by declining death rates and by falling demand for traditional viewings and services. Not surprisingly, more and more mortuaries are marketing pre-arranged funerals and such extra services as videotaping of the last rites.

The entry of a big-time public company like Stewart promises to increase competition in the Baltimore area's funeral industry. The chain's intention is to provide "total service" through the cemeteries it acquires. What is known in other industries as "vertical integration" is coming to mortuary operations.

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