About Companhia Brasileira De Distribuicao
Companhia Brasileira de Distribuição engages in the retail of food, clothing, home appliances, electronics, and other products through its chain of supermarkets, specialized stores, and department stores especially under the trade names Pão de Açúcar, Minuto Pão de Açúcar, Mercado Extra, Minimercado Extra and the neighborhood shopping mall brand Conviva. The company is the largest traditional retailer in sales in the food segment in Brazil and the largest supermarket chain in Colombia in. The company also has perations in Uruguay and Argentina. The company operates in the Brazilian retail industry, which consists of sales of food and non-food products to individual consumers at supermarkets through the banners Pão de Açúcar, Mercado Extra and Compre Bem (SCB Distribuição e Comércio Varejista de Alimentos Ltda.); proximity and specialized stores through the banners Mini Extra, Minuto Pão de Açúcar, Pão de Açúcar Adega and Aliados Minimercado; and gas stations through the Pão de Açúcar, Mercado Extra and Compre Bem banners. The Brazilian retail segment also includes revenues related to rentals of commercial spaces in its stores and e-commerce sales. In addition, the company is a leading food retailer in Colombia, mainly with hypermarkets and supermarkets and also cash and carry stores, proximity stores, loyalty programs, private label products and financial services business. As of December 31, 2021, the Grupo Exito (Éxito and its consolidated subsidiaries) operated in Colombia, Uruguay and Argentina, through the following banners: Exito, Carulla, Surtimayorista, Surtimax, Super Inter and Viva Malls in Colombia; Devoto, Disco and Geant in Uruguay, and Libertad, Mini Libertad and Paseo Libertad Malls in Argentina. The company operates in the retail of food and non-food products. Food products include non-perishables, beverages, fruits, vegetables, meat, bread, cold cuts, dairy products, cleaning products, disposable products and personal care products. The company also sells home appliances and other non-food products, which include clothing items, baby items, shoes and accessories, household articles, books, magazines, CDs and DVDs, stationery, toys, sports and camping gear, furniture, mobile phones, mattresses, pet products, gardening equipment and tools and electronics products, such as personal computers, software, computer accessories and sound and image systems. The company also offers some of the products listed above under its private label. In addition, the company sells its products through its websites. The company also retails the non-food products it sells at its drugstores, such as medications and cosmetics, and non-food products it sells and the services it provides at its gas stations. Segments Brazilian Retail – Includes the banners Pão de Açúcar, Extra Hiper, Extra Supermercado / Mercado Extra, Minimercado Extra, Minuto Pão de Açúcar, Comprebem, Posto Extra, Drogaria Extra and GPA Malls & Properties. Grupo Exito - Includes the company Exito (ColÔmbia) and its subsidiaries Libertad (Argentina) and Disco (Uruguay). Exito also operates the brands Surtimax, Super Inter and CarullaHome, consequence of the business combination of Exito in November 2019. Other Businesses – Includes the results of James Delivery (James Intermediação S.A.); Cheftime ( Cheftime Comércio de Refeições S/A); Stix (Stix Fidelidade e Inteligência S.A.); and the results of the company’s investment in associate Cnova N.V. Geographic Distribution of Stores Brazil The company operates mainly in the Southeast region of Brazil, in the states of São Paulo, Rio de Janeiro and Minas Gerais. The Southeast region accounted for 80% of the company’s net operating revenue for the year ended December 31, 2021, while the other Brazilian regions (North, Northeast, Midwest and South), in the aggregate, accounted for 20% of its consolidated net operating revenue for the year ended December 31, 2021. Colombia, Uruguay and Argentina The company has stores in the other Latin American countries where it has operations in Colombia, Uruguay and Argentina, among supermarkets, hypermarkets, low cost and proximity stores. Operations in Brazil The company has a multi-channel, multi-format and multi-region portfolio ensuring a strong position in offering products and services to its customers. The company has been a long-standing player in the Brazilian retail market. The company’s Brazilian retail segment operates under different formats and banners allowing it to reach customers from all socio-economic backgrounds in Brazil. Store Formats and Banners Hypermarkets Extra Hiper Stores The company expects to assign all the stores to Sendas under the Real Estate Properties Assignment Transaction by the end of May 2022. Starting in the second semester of 2022, the company will no longer operate under the Extra Hiper banner and will focus on the premium and proximity segments, notably under the banners Pão de Açúcar, Minuto, Compre Bem and Mercado Extra. Supermarkets Pão de Açúcar The company’s Pão de Açúcar banner is its premium supermarket chain and is considered a reference for innovation in the retail industry, providing high quality services, a wide assortment of products to its customers and promoting concepts of healthy living and sustainability. Pão de Açúcar stores are supermarkets which are predominantly located in large urban areas, such as the São Paulo metropolitan area, where over one-third of the Pão de Açúcar stores are located. The Pão de Açúcar stores target the Brazilian class A and class B household consumers. The Pão de Açúcar stores aim to provide to customers a pleasant shopping environment, a broad mix of high-quality products, innovative service offerings and a high-quality service. Mercado Extra and Compre Bem Stores These banners have a neighborhood supermarket format focused on middle-class customers, and offer a complete mix of food products, general merchandise, a wide range of household items and a complete portfolio of private label products. Mercado Extra and Compre Bem stores are predominantly located in São Paulo. The sale of food products and non-food products represented 97% and 3%, respectively, of net operating revenue of Mercado Extra and Compre Bem stores in 2021. Proximity Stores Mini Extra, Minuto Pão de Açúcar and Aliados Minimercado The company’s proximity stores operate under the Mini Extra, Minuto Pão de Açúcar and Aliados Minimercado brands. These stores serve customers seeking for a convenience in their daily routines. As of December 31, 2021, the Mini Extra, Minuto Pão de Açúcar and Aliados Minimercado stores had an average sales area per store of 244 square meters. The sale of food products and non-food products represented 99% and 1%, respectively, of net operating revenue in proximity stores in 2021. Mini Extra, Minuto Pão de Açúcar and Aliados Minimercado stores are predominantly located in the city of São Paulo. The Mini Extra, Minuto Pão de Açúcar and Aliados Minimercado stores target all Brazilian classes. In 2016, the company launched the Aliados Compre Bem project, which was renamed to Aliados Minimercado in 2018, a business model for neighborhood stores that consists of a partnership between it and independent retailers, in which it provides its operational expertise to meet and increase the sales potential of this market segment by supplying products to participating independent retailers. Gas Stations The company operates gas stations in Brazil, the vast majority of which are located within the parking area of certain of its stores, mainly of Extra Hiper stores. The company also has gas stations that operate under its Pão de Açúcar, Mercado Extra and Compre Bem banners. The company’s gas stations that are located in the parking areas of Extra Hiper stores, will also be assigned to Sendas under the Real Estate Properties Assignment Transaction. The company has partnerships with Ipiranga and Shell, two major gas station chains in Brazil. These partnerships allow the company to offer co-branded gas stations, such as Extra-Ipiranga and Pão de Açúcar-Ipiranga. The location of the company’s gas stations allows its customers to shop in its stores and refuel their cars while they are on its premises. The company’s strategy for its gas stations is based on offering competitive prices and reliable and high-quality fuel. E-commerce Food Delivery and In-Store Pick-Up The company is a one of the leading player in the Brazilian food e-commerce segment through its food delivery platforms, including Pão de Açúcar Delivery, or PA Delivery, and Clube Extra Delivery, through which its customers can order their products online and receive them at home (within 24 hours for conventional delivery and four hours for express delivery). This service also allows the company to expand and deepen its client base, reaching new clients through its app and website, while also furthering its omnichannel approach for existing clients. Through this service, the company also offers its Click and Collect service, a purchasing option through which its customers are able to order online and choose the best time to pick up their food order at selected Pão de Açúcar and Extra stores. The company offers the express and/or click and collect concepts at various stores under the Pão de Açúcar, Minuto Pão de Açúcar, Mercado Extra and Compre Bem banners, in the Southeast, South, Midwest and Northeast regions of Brazil. In December 2018, the company launched Pão de Açúcar Adega, an online platform for the sale of special beers and wines with nationwide delivery and a brick-and-mortar store in the city of Sao Paulo, providing its customers with a truly omnichannel experience. Pão de Açúcar Adega offers the company’s subscription service, Pão de Açúcar Viva Vinhos, through which customers can have its wines delivered directly to their homes. In 2018, as part of the company’s digital transformation strategy, it acquired the delivery app James, which is a multiservice platform for ordering and delivering ots products, connecting customers, deliverers and establishments. This acquisition complements the delivery methods that the company makes available to its customers at its brick-and-mortar stores. In addition, the deliveries through James complements its same day and next day deliveries and provides its customers with one-hour delivery option. The company has expanded James operations to 32 cities in Brazil located in the States of São Paulo, Rio de Janeiro, Ceará, Paraná, Tocantins, Pernambuco, Piauí, Sergipe, Minas Gerais, Mato Grosso, Mato Grosso do Sul, Paraíba, Bahia and the Federal District (Distrito Federal). Loyalty Programs My Discount The My Discount program, launched in July 2017 in Brazil, consists of a mobile app that provides personalized discounts to customers who are members of the loyalty programs of the Pão de Açúcar and Extra banners. At the end of 2021, 67% of the company’s net operating revenue in the Brazilian retail segment were related to its loyalty programs. This number corresponds to approximately 58% of the net operating revenue of the Extra banner (Clube Extra) and 86% of the net operating revenue of the Pão de Açúcar banner (Pão de Açúcar Mais) in 2021. The company’s two phone apps, Pão de Açúcar Mais and Clube Extra, are important tools to increase its customers’ digitalization and create ultra personalization, where it can give personalized discounts for each customer, and long-term relationships. In March 2018, the company added the My Rewards program to its mobile apps, providing personalized challenges to customers who are members of the loyalty programs of the Pão de Açúcar and Extra banners. Stix Fidelidade In 2019, the company and Raia Drogasil (Raia Drogasil S.A.) formed Stix (Stix Fidelidade e Inteligência S.A.), the legal entity that operates the Stix Fidelidade loyalty program. The loyalty program allows its users to earn points on purchases made on associated retailers’ websites and stores, including it and Raia Drogasil, which are redeemable for products, services, discounts and other benefits. Stix Fidelidade also has Banco Itaú as a strategic partner responsible for enabling Banco Itaú’s clients to acquire points under Stix Fidelidade under certain terms and conditions. Stix Fidelidade was launched in October 2020 as the first retail coalition in Brazil and its opt-in platform reached more than one million customers at the end of that year. The program was developed for the company to better adapt to its customers’ demand for delivery and e-commerce services and a wider program that allows the acquisition of fidelity points in exchange of products acquired in retail businesses. From all the rewards distributed, 80% were activated and 30% of Stix Fidelidade customers have earned points through more than one brand that is part of the program (Pão de Açúcar, Extra, or Raia Drogasil). In February 2020, the company announced the approval by the Administrative Council of Economic Defense (CADE) of the transaction that created Stix Fidelidade. The company expects to enter into partnership agreements with other retailers to turn Stix Fidelidade into a loyalty program coalition comprising several retailers nationwide in Brazil. Financial Services The company extends credit to customers through FIC (Financeira Itaú CBD S.A. Crédito, Financiamento e Investimento), its partnership with Itaú Unibanco S.A. (Itaú Unibanco), one of the largest privately-owned financial institutions in Brazil. FIC exclusively offers credit cards, financial services and insurance coverage at the company’s stores. The company and Sendas (Sendas Distribuidora S.A.) each hold 50.0% of Bellamar (Bellamar Empreendimentos e Participações Ltda.), a holding company that holds an investment in 35.8% of the shares of FIC. Itaú Unibanco and Via hold 50.0% and 14.2%, respectively, of the shares of FIC. Itaú Unibanco determines the financial and operational policies of FIC and appoints the majority of its officers. FIC operates financial services kiosks in the company’s stores in Brazil with exclusive rights to offer credit cards, financial services and insurance policies, except for extended warranties. FIC has been operating for more than ten years and had a portfolio of credit card accounts from customers, including the portfolio of Cartão Extra, Cartão Pão de Açúcar, Cartão Passaí and Cartão Ponto Frio. The company maintains its strategy to increase the share of FIC’s credit cards and financial services at its stores in Brazil as an important loyalty tool and mechanism to increase sales and additional profitability. FIC’s credit cards offer payment options for the cardholders at its stores, aiming at providing them with benefits and convenience. Real Estate Business Units GPA Malls is the company’s real estate business unit responsible for the transformation and management of commercial spaces in Brazil. As of December 31, 2021, GPA Malls was present in 15 Brazilian states and the Federal District and managed approximately 210 commercial galleries in Brazil and two neighborhood commercial centers. As of December 31, 2021, GPA Malls had more than 246,000 square meters of gross leasable area. The company calculates its gross leasable area by subtracting the areas in its commercial spaces owned by third parties and not available for lease by it from gross commercial area, which corresponds to all the commercial area in its commercial spaces. Operations in Colombia The Grupo Exito is a leading food retailer in Colombia, with a portfolio mainly comprising hypermarkets and supermarkets and also comprising cash and carry stores, proximity stores, loyalty programs, private label products and financial services and real estate businesses. The Exito, Carulla, Surtimax, Super Inter and Surtimayorista banners had stores in Colombia. Grupo Exito’s operations in Colombia corresponded to 77% and 48% of Grupo Exito’s and CBD’s total gross revenue in 2021, respectively. Store Formats and Banners Hypermarkets Exito Exito is a hypermarket banner with a food and non-food product offering tailored to the needs of all segments of the Colombian population. Exito stands out for the quality of its private-label apparel range, which enjoys a good reputation with customers. The stores also provide a variety of services, including the Points Exito loyalty program, mobile phones, travel deals, and financial services (credit cards and insurance) and are organized in a department store style. Exito hypermarket stores target the Colombian middle and middle-high classes. The banner continued to develop its Exito WOW hypermarkets, offering an even more digital customer experience in a remodeled store. The sale of food products and non-food products represented 54% and 46% of Exito banner’s net operating revenue in 2021, respectively. The company focuses on developing the new generation of Exito hypermarkets known as Wow to link the best of the physical and virtual worlds in one place: a shopping experience connected to the digital world, superior customer service and improved focus on fresh products. Exito Wow stores are digitally connected hypermarkets that integrate the digital channels and physical services offered by the Exito banner to other services, including banking services, co-working area, gourmet food-court, omnichannel zone, among others. The Exito Wow model is present in the cities of Bogotá, Medellin, Cali, Santander, Boyacá, and Atlantic Coast. Supermarkets Exito Super and Vecino The Exito brand also includes two different supermarket banners: Exito Super stores, offering a range of primarily food products and Exito Vecino stores, offering a wider assortment of non-food products. Carulla Carulla consists of supermarkets and convenience stores predominantly located in main cities, such as Bogotá, Medellín, Cali, Barranquilla, Bucaramanga, among others, and is renowned for its high quality. Carulla stores focus mainly on offering imported and premium products, a highly quality assortment of fresh products and are nationwide recognized for having the best bakery in the country. In 2021, the banner continued to develop its new Carulla Fresh Market format, offering an expanded offering of fresh produce and more premium service counters. Low-Cost Supermarkets Super Inter and Surtimax Super Inter and Surtimax are considered low-cost supermarkets characterized by offering low prices for a complete basic basket of products, good quality meat, fresh fruits and vegetables and a large assortment of bulk grains. These stores have a regional focus, offering products according to the local consumer needs. Super Inter stores operate in approximately 17 cities in the Coffee and Pacific regions of Colombia. Surtimax stores are located in residential areas and offer a wide portfolio of private label products. Super Inter’s sales of food products and non-food products represented 99% and 1%, respectively, of its stores net operating revenue in 2021. Surtimax’s sales of food products and non-food products represented 99% and 1% respectively of its stores net operating revenue in 2021. Cash and Carry Stores Surtimayorista Surtimayorista stores have been operating in the cash and carry segment in Colombia for over five years and are focused on the commercialization of products for retail and institutional consumers, such as food retailers (including restaurants, pizzerias and snack bars), conventional retailers (such as grocery and small family-owned stores) and end users (including schools, small businesses, churches and hospitals). It offers more than 2,100 items of grocery, food, perishable, beverage, wrapping, personal care and cleaning products, among others and 500 additional non-food items. Proximity Stores Exito Express Exito Express is a proximity store which offers fast-moving consumer goods and fresh products, as well as a selection of household cleaning and multimedia products. Carulla Express Carulla Express is a proximity store which offers fast-moving high-quality consumer goods and fresh products in the premium segment, as well as take-away products, such as sandwiches, fresh fruit, cakes and pastries. Loyalty Program Puntos Colombia is a 50/50 joint venture between Grupo Exito and Bancolombia in Colombia. Puntos Colombia operates a loyalty program pursuant to which its users earn points on purchases made on partners’ websites and at their stores. These points are redeemable for products or services available at Puntos Colombia platform, in addition to discounts and other benefits. Puntos Colombia had affiliated businesses, including Celio, Pilates and CineColombia and the company’s customers redeems points under the Puntos Colombia program. Other Businesses and Services Other revenue include income mainly from complementary businesses, such as the real estate, financial, travel, insurance, mobile and money transfer businesses. Financial Services Tuya is a 50/50 joint venture between Grupo Exito and Bancolombia. Tuya is a financial company focusing on issuing credit cards mainly for low and middle-income segments and promote access to financial services to segments that the traditional banking system does not approach. As of December 31, 2021, Tuya issued 2.8million credit cards, representing 17% of the credit card market share in Colombia. Real Estate Business Units Viva Malls is the company’s real estate business unit which is responsible for the creation and management of commercial spaces in Colombia. As of December 31, 2021, Viva Malls was present in eleven Colombian cities and managed around six commercial galleries and 12 shopping centers. As of December 31, 2021, Viva Malls had 567,747 square meters of gross leasable area. Operations in Uruguay and Argentina Grupo Exito’s operates in Uruguay and Argentina under the following banners: Devoto (supermarkets and proximity stores), Disco (supermarkets) and Geant (hypermarkets) in Uruguay; and Libertad (hypermarkets) and Mini Libertad (proximity stores) in Argentina. Libertad and Mini Libertad banners had stores in Argentina; and Devoto, Disco and Geant banners had stores in Uruguay. Paseo Libertad Malls is the company’s real estate business unit which is responsible for the creation and management of commercial spaces in Argentina. As of December 31, 2021, Paseo Libertad Malls was present in nine Argentinian provinces and managed commercial galleries and shopping centers. Grupo Exito’s operations in Uruguay and Argentina corresponds to 16% and 7%, respectively, of Grupo Exito’s total gross revenue in 2021 and 8% and 4%, respectively, of CBD’s total gross revenue in 2021. Private Label Products In 2018, the company started to focus on repositioning its private label portfolio, with a priority on improving quality and price competitiveness as an important process for building client loyalty in the markets in which it operates. The company’s main private labels are Taeq, which focuses on the healthy food segment, and Qualitá, which offers high-quality food products at affordable prices. The company also has Casino (Casino, Guichard-Perrachon S.A.), Cheftime, Club des Sommeliers, Confraria, Finlandek, Arkitect, Bronzini, Cast, Bambini, Boomy, Frescampo and Custer, among others, in its private label portfolio. The company launched the Taeq products in 2006. Its portfolio comprises healthy food products, including cereals, cereal bars, yogurts, teas, pasta, meats, soups, isotonic, juices, organic and natural products, among others. Taeq products are offered at the company’s Pão de Açúcar and Extra stores (supermarkets and proximity stores) and at its websites. The company also offers its Taeq products in its stores in Colombia. The company launched the Qualitá banner in 2008. Its portfolio comprises a variety of products, including frozen food, cleaning supplies, dairy products, among others. In order to achieve the goal of keeping a high-quality in the company’s products while selling them at affordable prices, Qualitá products undergo a strict standard of supply selection, logistics control and consumer testing before being offered to the company’s clients. Qualitá products are offered at the company’s Pão de Açúcar and Extra stores (supermarkets and proximity stores) and at its websites. Casino is a French brand that offers imported products selected and approved by French chefs. Club des Sommeliers is a wine brand that offers more than 90 wine labels from eleven nationalities. Bambini and Boomy are children clothing brands. Arkitect, Bronzini, Custer and Cast are clothing brands. In November 2019, the company acquired 79.6% of the equity interest in Cheftime, a company that prepares and offers ready-to-eat meal kits, semi-cooked meal kits, and cook-it-yourself meal kits, enabling anyone to prepare their own food and inspiring its consumers to take up cooking as a hobby. In 2019, the company started to sell Cheftime products solely in the format of ready-to-cook meal kits, assembled with pre-portioned ingredients paired with the recipes. Frescampo is a Colombian low-cost brand that offers quality food products at reasonable prices. Frescampo products are offered at the company’s stores in Colombia. In 2021, the sales of the company’s private label in the food category represented 21% of its total food sales in Brazil and 16% of its total food sales in Colombia. Seasonality In Brazil, Colombia, Uruguay and Argentina, the company has historically experienced seasonality in its results of operations, principally due to traditionally stronger sales in the fourth quarter holiday season and Black Friday promotions, which help to boost fourth quarter sales in mainly non-food categories. In recent years, the company’s average sales revenues during the fourth quarter have typically been approximately 14% above average sales revenues during the other quarters of the year. The company also experiences strong seasonality in its results for the months of March or April as a result of the Easter holiday, when it offers specialized products, as well as in FIFA World Cup years, when some of its event-focused products have an increase in sales. Seasonality relating to the availability of some of the company’s products (such as fruits and vegetables) generally does not affect its results due to the large and diverse selection of products it offers to customers. Products The company operates in the retail segment of food and non-food products. Food products include non-perishables, beverages, fruits, vegetables, meat, bread, cold cuts, dairy products, cleaning products, disposable products and personal care products. The company also sells home appliances (durable goods (i.e., electronics, furniture and other items for the home)) and other non-food products, which include clothing items, baby items, shoes and accessories, household articles, books, magazines, CDs and DVDs, stationery, toys, sports and camping gear, furniture, mobile phones, mattresses, pet products, gardening equipment and tools and electronics products, such as personal computers, software, computer accessories and sound and image systems. The company also offers some of the products under its private label (own branded products, including Qualitá, Taeq, Cheftime, Casino, Club des Sommeliers, Fábrica 1959, Confraria, Finlandek, Arkitect, Bronzini, Cast, Bambini, Boomy Nous, Frescampo and Custer). In addition, the company sells its products in the retail segment through its websites. The company includes in the retail segment the non-food products it sells at its drugstores, such as medications and cosmetics, and the non-food products it sells and the services it provides at gas stations. The company’s products are mostly ready-for-sale products that it purchases and resells to its end-user customers. Only a portion of the company’s products are produced at its stores, by its technical team for the development of perishables. In certain circumstances, the company has entered into partnerships with suppliers who deliver semi-finished products that are finished at its stores. The products manufactured or handled at the company’s stores include fruits and vegetables, which are cut or packaged at its stores; meat (beef, pork, chicken and fish), as well as cold cuts and cheeses, which are cut, weighed and packaged at its stores; ready-to-eat meals sold at its deli counters; and bread, cakes and sweets made at the bakeries located within its stores. Distribution and Logistics In Brazil, in order to efficiently distribute perishable food products, grocery items and general merchandise, the company operates eleven distribution centers and warehouses strategically located across the country, with a total storage capacity of approximately 400,479 square meters. The locations of the company’s distribution centers enable it to make frequent shipments to stores, which reduces the need of in-store inventory space and limits store inventories. The company’s distribution centers are significantly supported by pd@net, a business-to-business technology platform, which links its computer automated ordering system to its distribution centers and suppliers to automatically replenish its inventory. The company organizes its logistics and distribution processes in accordance with the products and services sold under its banners in Brazil, Colombia, Uruguay and Argentina. Stores, Supermarkets and Hypermarkets Brazil The logistics process to supply the company’s stores, supermarkets and hypermarkets, excluding drugstores and gas stations, included distribution centers located in the states of São Paulo (including a distribution center specifically focused on its proximity stores), Rio de Janeiro, Ceará, Pernambuco and the Federal District. The company’s distribution process is performed by an outsourced fleet. As of December 31, 2021, the company’s centralization rate (the percentage of revenue from the products supplied at its stores that comes directly from its distribution centers) was approximately 65%. Orders made for the company’s non-centralized products are made directly by the stores and delivered by the suppliers following the supply model known as Direct Delivery. As of December 31, 2021, approximately 35% of the company’s stores sales corresponded to Direct Delivery products, especially ornamental plants, cigarettes, ice cream, yogurt and magazines. Colombia, Uruguay and Argentina The logistics process to supply the company’s stores, supermarkets and hypermarkets, excluding its cash and carry operation in Colombia, included distribution centers located in Colombia, Argentina and Uruguay. The company’s distribution process is performed by an outsourced fleet. In Colombia, the company operates ten distribution centers and three nodes located in Bogotá, Medellín, Cali, Santander and the Atlantic Coast with total storage capacity of 272,902 square meters. In Uruguay, the company operates four distribution centers and warehouses strategically located across Montevideo, with a total storage capacity of approximately 40,000 square meters. In Argentina, the company’s distribution center is located in the center of the country, in the city of Cordoba, with an average distance of 620 km to its stores. E-commerce Food Delivery In Brazil, since 2016, the company has operated a dedicated distribution center in the city of São Paulo focused on its online and proximity operations. This distribution center is responsible for regular online delivery requests. Additionally, certain of the company’s stores offer express delivery (within four hours) services. In Colombia, the company operates one of the largest e-commerce operations in the country through its direct online and marketplace sales, and the new channels, such as the Turbo Fresh express delivery service and other, including delivery applications. In order to operate these channels, the company has a network of dedicated distribution centers in Bogota serving mainly non-food products, storages in Medellin for food e-commerce, and deliveries from stores used mainly to serve delivery applications and websites. Drugstores The main Brazilian pharmaceutical distributors and regional distributors supply the company’s drugstores across the country, with whom it has entered into supply agreements for medications and other products, such as cosmetics. The logistics system varies between centralized deliveries through the company’s distribution centers and decentralized deliveries. Gas Stations The company’s gas stations are supplied by exclusive suppliers in Brazil. In 2021, the company used two suppliers. Supply orders are made individually by each station, and fuel is requested through purchase orders or pre-agreed daily supply orders, pursuant to the service agreements entered into by each gas station. Fuel transportation is carried out exclusively by the company’s suppliers while unloading operations are closely followed by its employees for safety and quality control reasons. The supply process for compressed natural gas (gás natural veicular), or GNV, involves direct delivery by regional suppliers to the gas stations using pipelines connected to the entrance boxes located at the gas stations and holding fuel meters installed and controlled by the dealers themselves. This equipment regularly measures the GNV volumes supplied. GNV is then sold to customers through dispensers attached to these entrance boxes, using specific pipelines. Marketing The company’s marketing policy aims at attracting and retaining its customers. To this end, the company carries out integrated marketing campaigns that are specific to each store banner in which it operates and is structured and directed at the target customer market for each store banner. Credit Sales Credit Card Sales: All of the company’s store formats and its e-commerce operations accept payment for purchases with major credit cards, such as MasterCard, Visa, Diners Club, American Express and co-branded credit cards issued by FIC. The company’s stores also accept virtual credit cards through methods, such as Apple Pay. Sales to customers using credit cards accounted for 47.2% of the consolidated net operating revenue for the company’s Brazilian retail segment in 2021. Of this total, sales through the company’s FIC co-branded credit cards accounted for 7.0% of its net operating revenue in 2021. Food Vouchers: The company accepts food vouchers as payment at its stores. Intellectual Property The company considers its brands to be one of its most valuable assets and it has worked extensively to define the characteristics of each of its banners (Extra Hiper, Supermercado Extra, Mercado Extra, Mini Extra, Pão de Açúcar, Minuto Pão de Açúcar, Compre Bem, Exito, Geant, Carulla, Super Inter, Surtimax, Surtimayorista, Libertad, Disco, Devoto and Viva) with respect to the expectations, consumption patterns and purchasing power of the different types of customers and income levels. In Brazil, it is necessary to officially register a trademark with the National Industrial Property Institute (Instituto Nacional de Propriedade Industrial), or INPI, in order to acquire trademark rights. This registration gives the owner the exclusive right to use the trademark throughout Brazil for a specific period of time, which may be renewable. As of December 31, 2021, the company’s most important trademarks (Pão de Açúcar, Extra, Qualitá, Taeq and Compre Bem, among others) were duly registered with INPI and it had approximately 2,164 trademarks registered or in the process of being registered in Brazil and abroad, of which 1,993 trademarks are in Brazil. The company’s business relies on intellectual property that includes the content of its websites, its registered domain names and its registered and unregistered trademarks. The Pão de Açúcar, Extra and other domain names the company uses in its e-commerce business are valuable assets and essential to the identity of its business. The company owns the following domain names, among others: www.extra.com.br, www.gpabr.com, www.paodeacucar.com.br, www.paodeacucar.com and www.deliveryextra.com.br. In Colombia, it is necessary to officially register a trademark with Colombia’s Superintendence of Industry and Commerce (Superintendencia de Industria y Comercia), or SIC, in order to acquire trademark rights. This registration gives the owner the exclusive right to use the trademark throughout Colombia for a specific period of time, which may be renewable. Grupo Exito owns a portfolio of more than 1,600 duly registered trademarks, including every trademark class, among 32 countries, of which more than 1,060 are in Colombia, including, among others, the brands Exito, Carulla, Surtimax, Superinter, Surtimayorista associated to the retail business and Arkitect y Bronzini, associated to the fashion and textile industry. Additionally, Grupo Exito owns the following domain names, among others: www.grupoexito.com.co, www.exito.com, www.carulla.com, www.surtimax.co and www.arkitect.com.co. These domain names are listed for informative purposes only and the information contained in these websites is not incorporated by reference in this annual report. Competition Brazil The company’s main competitors in the Brazilian retail segment in the state of São Paulo are Carrefour (Carrefour Brazil), Futurama, Mambo, Pastorinho, Sonda, Dia and Grupo BIG. In the city of Brasília, the company’s principal competitors are Big Box, Carrefour, Super Cei and Super Maia. In the state of Rio de Janeiro, its principal competitors are Guanabara, Mundial, Prezunic and Zona Sul supermarkets. In the states of Paraíba, Pernambuco, Ceará and Piauí, the company’s principal competitors are the local supermarkets, in addition to Bompreço and GBarbosa. The principal competitor of the company’s Extra hypermarkets is Carrefour, which operates stores in the Southeastern and Southern regions of Brazil, and Grupo Big, which operates through various banners in the Southeastern, Northeastern and Southern regions of Brazil. The company is one of the leading player in food e-commerce in Brazil, through the operations of Pão de Açúcar and Extra banners. The company’s main competitors in this segment are Carrefour, Saint Marche, Mambo, Sonda and Zona Sul. Colombia The company’s main competitors are Supertiendas Olímpica (and its subsidiary Supertiendas Cañaveral), Grupo Cencosud (Jumbo and Metro) and discounters, which have been increasingly gaining market share, such as Koba Colombia S.A. (Tiendas D1), Mercadería Justo & Bueno Discount Store and Supermercados Jerónimo Martins (ARA). Regulatory Matters Exito Group is a registered company in the Colombian stock market, and accordingly, is subject to regulations issued by the Financial Superintendence. History Companhia Brasileira de Distribuição was founded in 1948. The company was incorporated in Brazil under Brazilian law in 1981.