Rising Costs of the Retail and Funeral Industry

The retail industry provides food to over 64 million people daily in the UK. Retail sales of PS177.5bn contributes 51% to the UK economy. The company has a workforce of 3.8 million people, which is 14% of employment in the UK (IGD 2015).

Figure: Total Retail Spend by Category (Retail Economics, 2016).

As shown in the image, the retail sector can be divided into various types. The biggest portion is the food retail. Clothing also plays a significant role in the retail industry. In addition, online retailer is becoming ever more well-known (Retail Economics 2016, 2016).

As a result of the advancement in technology, manufacturing companies have increased the efficiency of their workforce by 20.7 percent over the last 10 years. Meanwhile, the efficiency of the agricultural sector has increased by 20% over the past 25 years (IGD 2015). The main reason for the increase in the growth of the retail business is dependent on consumers’ spending. The customer will be enticed to the discounts and high-quality service. There are plenty of studies to identify groups based on distinct strategies for retail. For larger companies, it is able to afford the capital and resources to attain the economics of scale. Thus, a low-cost strategy could be a better choice. For small businesses, customer service, product specialization, or customization rather than the low cost may be recognized (Megicks 2011). Retail industry SMEs surpass those of any other industry and reach 318,470 (IGD 2015). Tesco is the biggest retailer in the UK with PS54.433 million in sales. Sainsbury, ASDA is also bigger, with around 23 million in comparison to the other stores.

Through the years shares of the largest companies in the sector declined while discount stores like Aldi and Lidl have seen a significant increase (Source).

Retail:

IGD (2015). THE UK’S FOOD AND GROCERY INDUSTRY. Available at: 2015http://www.igd.com/Documents/Other%20downloads/Grocery%20Industry%20A5%20booklet%20update%20online%20version.pdf

Phil Megicks (2001) Competitive strategy types in the UK independent retail sector, Journal of Strategic Marketing, 9:4, 315-328, [Online] Available at: http://www.tandfonline.com/doi/pdf/10.1080/09652540110079029?needAccess=true

Retail Economics (2016) UK Retail Sales http://www.retaileconomics.co.uk/download/Sample%20-%20UK%20Retail%20Sales.pdf

About PS1billion is estimated to be made from the more than 600,000 funerals being held in the UK funerals each year (UK Funerals Online). Prices vary greatly due to funeral directors’ professionalism. The business is worth PS1.7bn each year. Based on the Office for National Statistics, the rate of death increased by the fastest rate ever since the year 1968 (Financial Times 2016,). The rate of death in the United Kingdom increased in 2012-2013 as well as aided by the increase in the business (IBISWorld 2016, 2016).

The two UK market leaders in the funeral companies are two of the top funeral groups in Britain: Co-operative Group (CWS Ltd) and Dignity Caring Funeral Services (Dignity Plc). CWS Ltd. Co-operative Group (CWS Ltd) has more than 675 branches across the UK and performs more than 90,000 funerals per year. They also manage the North Eastern Co-operative. Dignity is home to more than 500 branches, and they conduct 75,000 funerals per year. They collectively control 25 percent of the market (UK Funerals Online). The remainder of the funeral business is comprised of smaller independent companies.

As per the line chart, the cost of funerals is increasing year on year. It is reported that the Co-operative Group reported a 9.9 percent increase in sales for funerals and Dignity the sole listed UK funeral service provider, said its pre-tax profits have increased by nearly a quarter in the year 2015. The two major companies held around 30 percent of the market share. Market analysts IBISWorld the market is projected to grow by 2.9 percent in the year 2016 (Financial Times, 2016).

 

Figure: The cost of rising of funerals (Financial Times, 2016).

Funeral:

UK Funerals Online (no time). The UK Funeral Industry. Available at: http://www.uk-funerals.co.uk/funeral-industry.html

IBISWorld (2016) Funeral Activities Market Research Report. Available at: https://www.ibisworld.co.uk/market-research/funeral-activities.html

Financial Times (2016). Funeral industry reaps profits as UK death rates rise. Available at: https://www.ft.com/content/b6053e72-fd8b-11e5-b3f6-11d5706b613b

There is a UK insurance industry is the biggest of its kind in Europe as well as the 3rd largest worldwide. it is a key element in the British economy and manages investments of more than PS1.9 trillion. The industry also contributed PS29 billion of the GDP of 2012, and employed approximately 344,000 employees (Association of British Insurance 2014).

Insurance is a legal contract is represented by a policy that allows people or entities to obtain financial security from an insurance company (investopedia). In the insurance industry there are various kinds of insurance like home insurance, auto insurance as well as health insurance and medical insurance (All kinds of Insurance 2017).

The biggest players include Legal & General, Aviva and Prudential.

Aviva is the largest UK insurer that offers insurance savings, investment and insurance products to more than 31 million customers around the world. Aviva is committed to making a positive social impact to create a sustainable business as well as a strong brand. It has been a part of the Legal & General over 175 years is committed to providing the top quality products along with transparent and fair service that ensures a security of your money.

For Prudential It manages PS562 billion in assets, which serves approximately 24 million consumers. It is a long-standing leading provider of pensions and life insurance in the UK and has assets in excess by PS255.4 billion.

Insurance:

http://www.investopedia.com/terms/i/insurance.asp

All Kinds of Insurance (2017). Available at: http://allkindsofinsurance.com/

Association of British Insurance (2014) Statistics. Available at: https://www.abi.org.uk/Insurance-and-savings/Industry-data

https://www.pru.co.uk/about/

http://www.aviva.co.uk/about-us/

https://www.legalandgeneral.com/about-us/

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