3. Selling expenses

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€ million

2011

2012

Personnel expenses

5,816

5,924

Cost of material

6,112

6,469

 

11,928

12,393

The increase in selling expenses is largely due to extraordinary effects that arose during the financial year 2012 both in the context of the divestment of the cash & carry business in the United Kingdom and the decision to discontinue sales brand Media Markt’s activities in China.

Higher personnel expenses essentially stem from the expansion of the METRO Cash & Carry and Media-Saturn sales lines. Restructuring measures, collective bargaining increases and higher performance-based payments compared with the previous year also contributed to the increase in personnel expenses. Opposite effects resulting from the decline in employee numbers compared to the previous year could not offset this increase.

The divestment of the cash & carry business in the United Kingdom, the decision to discontinue Media Markt’s activities in China and the disposal of Real’s Eastern European business, in particular, resulted in higher impairment losses and higher expenses for the formation of provisions in the cost of material. In addition, the expansion of the METRO Cash & Carry and Media-Saturn sales lines has also caused the cost of material to increase.