(Bloomberg) -- Even before a $12 million state funeral for the slain former Prime Minister Shinzo Abe prompted a public outcry, the Japanese have long grumbled about funeral costs, the highest in the world. Now, an increasing number of grieving families are opting for low-key send-offs, with the pandemic providing an extra reason to avoid large ceremonies.
Average spending per funeral in the past year was 1.1 million yen ($7,725), down 40% from an earlier, pre-Covid survey, according to Kamakura Shinsho Ltd., an online information service specializing in elderly care, funerals and graves. That’s still around a quarter of the average annual salary and doesn’t cover extra costs such as offerings to Buddhist monks. Including additional expenses, Japanese funerals cost around 3 million yen before the pandemic, around three to four times what’s spent in the US and Europe, according a 2020 survey by U.K.-based insurance provider SunLife Ltd.
Hiroya Shimizu, who organized his father’s funeral in early 2019, remembers being shown different hearses and floral arrangements but felt he ultimately had little control over costs.
“It’s not like you could compare prices on Amazon and Yodobashi,” said the 57-year-old hotel owner, referring to a popular e-commerce site for electronics. The final bill, he said, came to around 3.5 million yen. “You just pay what you’re told.”
While much of the recent decline was due to people opting for small-scale ceremonies to avoid the spread of Covid, many say the change is both overdue and unlikely to be fully reversed. Shinsuke Nakamura, a manager at Kamakura Shinsho, said Japan’s aging population and shift to smaller, nuclear families were also leading to smaller funerals.
“Covid just accelerated a trend that was already there, with people increasingly shifting toward family-only ceremonies,” he said.
Traditional Buddhist ceremonies, which account for a majority of Japanese funerals, are usually held over two days, with a wake held on the first evening and a formal funeral and cremation the following day. Those who attend are expected to give cash as a condolence gift, but such contributions are usually far outweighed by costs ranging from food catering to venue fees.
One expense that many find particularly opaque is the offering of cash to Buddhist monks, who read sutras at ceremonies and give religious names to the dead for the afterlife. Monks are paid around 200,000 yen on average for such services. There’s rarely an explicit price list, but a bigger offering is understood to ensure a more elaborate religious name.
Most grieving families feel under pressure to pay whatever they’re told is the going rate, as haggling over funeral fees would be considered unseemly. Over half of the people in a study published this year by the All Japan Funeral Directors Co-Operation said that they were unsatisfied with such unclear payments. Upselling by funeral homes is also common, according to the National Consumer Affairs Center, which fields hundreds of such complaints each year including cases of people being pressured to opt for bigger venues or fancier coffins.
Smaller funerals tend to keep such problems in check. Simple, so-called family funerals result in large cost savings and have become more popular since the pandemic. Unlike Abe’s family funeral in July, held ahead of Tuesday’s state funeral and attended by colleagues and other former prime ministers, most of these are limited to close relatives. Some are even shortened to a one-day event. Last year, one out of every two funerals was family-only, according to Kamakura Shinsho’s Nakamura. He added that such intimate gatherings also encouraged organizers to go for fewer frills.
“If it’s just family, no one’s going to be judging, and there’s a sense that the cheapest option is fine. But if you’re having neighbors, co-workers ... it’s embarrassing if it’s done too cheaply, so you might choose a grander altar, or coffin,” Nakamura said.
The fall in spending bodes poorly for the funeral industry, which by some estimates is worth 1.8 trillion yen and was briefly a target for investment funds a few years ago because of Japan’s aging population. In the past year, funeral operators have also been grappling with higher energy and import costs, with some raising prices on cremation fees and flower arrangements as well as dry ice used to preserve bodies.
Tear Corp., one of several listed companies involved with funerals, has seen its business grow by offering lower-price ceremonies and a transparent pricing structure. But it too sees a fall in spending per customer.
“Current conditions in the industry show the number of funerals up year-on-year, but the price per funeral is continuing to decline as ceremonies are downsized and sales from meals also fall,” the company said in its latest earnings report.
Some people said that family funerals could be lonely and disappointing, depriving mourners of a chance to grieve together and to connect with friends, colleagues and distant relatives of the deceased. But others who’ve attended small-scale ceremonies, including Shimizu, said they would likely become more common.
“I’ve been to a small one. We just bowed in prayer, and that was it,” he said. “But I think that’s all we need, fundamentally.”
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