A strategic area within CBD - for providing value to the operation, while reducing stock-out issues, costs and investments in inventories - the Supply Chain has a broad structure formed by 12 Distribution Centers (DCs). Located in the cities of São Paulo, Brasília, Fortaleza, Curitiba, Rio de Janeiro and Recife, they total 350 thousand square meters of warehousing space.

In line with the changes promoted by the commercial area relative to suppliers, the Company has launched the "Top Log", a certification program that will recognize its suppliers' qualification efforts, streamlining the supply chain and bringing gains to everyone, especially the consumer, who will enjoy guaranteed supply coupled with the best quality products offered in our stores.

The initiatives developed in 2004 were focused on the fulfillment of the Company's goals, presented in 2003:

Seek higher productivity and cost synergy in all categories, by fully using all available resources and providing fair remuneration to its suppliers. CBD has an efficient logistics operation, with an 85% centralization level, which enables it to have lower logistics costs and higher productivity gains. In addition, the higher productivity is related to recent investments in new DCs: flowers, fish, frozen products, fruits and vegetables. This performance has enabled the Company to operate the supply chain with the lowest costs of its history.

Consolidation and evolution of the supply chain specialization in three categories: perishable, grocery and non-food products, through projects that provide CBD with competitive differentials. In 2004, the Company continued its perishable product differentiation project, with an outstanding performance in terms of quality and efficiency reached by the seafood Distribution Center, which exceeded initial sales expectations, achieving in one year the capacity expected in 2.5 years and obtaining the ISO 9001 certification.

Exploitation of regional opportunities, reinforcing the positioning of the chains and strengthening the development of local suppliers, especially in the perishable product category. In line with the changes realized in the commercial area, CBD has also tried to exploit regional opportunities in the supply chain. With the integration of the Sendas structure in Rio de Janeiro, it has united its supply operations in a single DC, developed a new area for FV (fruits and vegetables), renovated its refrigerated containers and hired a logistics operator for the frozen products area. In order to strengthen its presence in the Northeast Region, it promoted important changes in Salvador
(in the state of Bahia), such as hiring a logistics operator for the
grocery, perishable and non-food categories.


2005 Goals

>> Ensuring full capacity, to support CBD's regional growth;
>> Increasingly investing in stock-out reduction with the development of new systems: stock-out management and supply provision;
>> Consolidation of perishable products' differentiation, in line with the Business Units' strategies, based on differentiated projects in the areas of FV, meat, bakery, delicatessen and seafood;
>> Adoption of a tracking system in its entire fleet, to optimize transportation, increase