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WEST VALLEY VIEW ARTICLE ON THE DEATH CARE INDUSTRY
Not even funeral homes are recession-proof
Many families are choosing least expensive options to say goodbye to loved-ones Rich Ott - Assistant Editor
Crystal Rose Funeral Home in Tolleson closed its doors Monday. The doors "technically" re-opened Wednesday.
"We've all been on an emotional roller coaster," said Kylie Roos, controller for Salt Lake City-based Security National Financial Corp., the parent company of Crystal Rose.
Roos was sent to Arizona from Utah to close two of Security National's three Arizona funeral homes: Crystal Rose, 9155 W. Van Buren St., and Greer Wilson Funeral Home, 5921 W. Thomas Road in Phoenix. Paradise Sunset Chapel at 3934 E. Indian School Road in Phoenix is the third funeral home owned by the multi-million-dollar company and was never on the chopping block.
Roos arrived in the desert and closed Crystal Rose Jan. 3. Word of the closing quickly spread through the community and the funeral home industry.
Before Roos could do the same to Greer Wilson, Security National President Scott M. Quist began to field interest in his two soon-to-be-closed funeral homes.
"We have received several inquires we are considering from other funeral homes in the area," Quist told the View Jan. 4. "In fact three people were in just today."
The president and chief operations office for Security National Financial Corp. - which operates in 40 states dealing in mortuaries, cemeteries, life insurance or mortgages - is "confident a transaction in some nature" will occur within a few weeks. The deal will either be a "partnership or sale with another facility in the Phoenix area."
So the company quickly decided it was better to sell opened businesses than closed ones, Roos said.
However, it wasn't all good news for employees of Crystal Rose and Greer Wilson funeral homes. About half of the staff was let go between the two businesses, with Crystal Rose re-opening with either one or two employees, Roos said. Greer Wilson will operate with a staff of four, he said.
Arizona market is soft
For years, Security National's three funeral homes in Arizona have not been making money, Quist said.
"Salt Lake City and California have been profitable, Phoenix has not," he said of the three places the company owns funeral homes and/or cemeteries. "The Arizona market has been very soft."
Quist elaborated on his remark.
"They keep telling me the death rate has gone down in Arizona, but I have a hard time believing that," he said.
What has hurt his two West Valley funeral homes is "competition and pricing pressures have been strong," Quist said.
There are too many funeral homes in Arizona, which is bringing prices down and those unwilling to do business at that price point will close, he said.
Which is not necessarily a good thing for consumers, because the remaining businesses will eventually raise their prices, he said.
"We are unwilling to wait for that, at least as a stand-alone," Quist said. "Now with a partner, we might be willing."
The "pricing phenomenon is unique to Arizona," he said. "We don't see it in California and Utah. If anything we see just the opposite. In Salt Lake City, for example, a Hispanic family opts for additional services while in Arizona we are seeing just the opposite, 'cremate the body and just give us the ashes.'
"Maybe Arizona has been hit harder by the economic times," Quist said. "Maybe it's that simple."
New kid on the block
One of Quist's competitors is Miguel Legaspi, who opened Avenidas Funeral Chapel at 522 E. Western Ave. in Avondale on Sept. 21, 2010.
"Families are cutting back because they can't afford it," he said. However, since his funeral home has been open, Avenidas has averaged 10 cases a month, and only three have resulted in direct cremation, he said.
"That's because people come here and they can afford something," Legaspi said. "We charge $585 for a direct cremation; that is everything inclusive, no hidden charges. My closest competitor charges $1,580."
Legaspi further compared his prices with competitors for a direct burial, stating the price at Avenidas, which includes a minimal wood casket, is $1,020, while a competitor charges $2,830, which includes a minimal metal casket.
"I'm retired Marine Corps, I have a little morality behind me," he said. "I can't do that to people."
Legaspi retired from the Marines in 1998 and has worked on and off again in funeral homes in both California and Arizona ever since, having experience working in the private and corporate sectors of the industry, he said.
The difference in price for a traditional funeral with all the amenities between a corporate-run funeral home and a private one "is about $5,000," he said. "And you know how corporations work, if there is no money to be made, they move on to greener pastures."
In 2009, 69 percent of all funerals ended in cremation, Legaspi said.
"Once that was identified [by the funeral home industry], your cremation cost shot up and went extremely high," he said. "They have to recover the loss of the casket sale.
"County burials are up right now because families are just turning their loved ones over" to avoid funeral charges and cemetery charges, he said. "It doesn't have to be that way."
Since Avenidas Funeral Chapel opened, word has gotten out about their prices, he said.
"I've got families coming to me from Mesa," Legaspi said. "Other than my Marine Corps career, I'm most proud of that."
Sean Thompson, co-owner and funeral director of Thompson's Valley West Funeral Chapel at 296 S. Litchfield Road in Goodyear, is proud of the service his staff provides as well.
When people find out what Thompson does for a living, they "always joke, 'Oh, you'll always have a job.' Not if you don't do a good job or you're perceived as not providing a good service," he said.
Fortunately for the Thompsons - Sean's wife Cynthia co-owns and operates the 54-year-old funeral home with him - the West Valley has embraced their services.
"We've helped more families in the past year than we ever have," Sean said of the funeral home, which they took over in 2005, adding Thompson's to the name. "I think that has to do with how we've handled our business since day one, not last week. You do a good job, provide excellent service and hope that is enough."
Before moving to Arizona, Sean Thompson worked at a funeral home in Oklahoma for 13 years. He immediately noticed one huge difference between the two states when it comes to funeral services.
"The funeral home I worked at in Oklahoma, about 13 percent of all deaths were cremations," he said. "In Arizona, about 80 percent are cremations."
Cremations are on the rise nationally, but in a state where they have been high for a while now, they have remained at a steady level, according to Thompson and Quist.
What is not at the same level from where it was five years ago is the amount of money people spend on funerals, Thompson said.
The funeral industry "is not immune to what is going on in the world," he said of the slow economy.
"If it is your time to go, people have no control over that," Thompson said. "What it [the economy] does control is what people spend and where they go."