Costs of materials and services

in CHF 000   2020   2019
Costs of material   40 013   55 402
Costs of services   118 523   131 586
Merchandise expenses   1 721   1 852
Total   160 257   188 839

Costs of materials and services decreased by CHF 28.6 million to CHF 160.3 million and accounted for 17.1 per cent of revenues as of the end of 2020 (previous year: 17.5 per cent). The reduction can be attributed to the lower costs for publishing and editorial services and reduced expenditure on paper. This reduction in expenditure on paper of CHF 13.7 million is due in turn to both a reduction in paper volumes and the lower price of paper. The CHF 13.1 million decline in services is largely attributable to the lower expenditure for printing services and for both editorial and publishing services. Expenditure on IT development and IT project costs also fell, with the previous year recording extraordinary costs associated with ongoing digitalisation, the introduction of the new ERP software and the transformation to a cloud solution (cloud services).