2012

1. Brazil’s Food Retail Map 2012 ARGENTINATel/Fax: +5411 4954 2001 BRAZILTel: +5511 5686 789 MEXICOTel: +5255 5525 5200 CENTRAL AMERICATel: + 502 2434 6425

2. 1. The Market in Brazil

3. Country’s Facts • Total Population: 194,933,000 people(e). • Urbanism: 87% of the population reside in urban areas. • Currency: Brazilian Real(USD 1 = 1.67 BRL) • GDP: USD 2,517,927,000,000 (e) • GDP per capita: USD 12,916 (e) • GPD Composition by Sector: Industry (26.8%), Services (67.4%), Agriculture (5.8%). • Main Cities: Brasilia (capital city), Sao Paulo, Rio de Janeiro, Belo Horizonte, Porto Alegre. • Territorial Organization: Brazil is formally called Federative Republic of Brazil is made up of 26 federal states and the Federal District, divided into 5,564 municipalities. • Main Religions: Most Brazilians are Roman Catholics (73.6%), while 15.4% of the population is Protestant and another 1.3% practice Santeria. • Language: The country’s official language is Portuguese. Source: IMF and the CIA World Factbook

4. Introduction to the Brazilian Retail Market • Brazil, with a population of over 194,933,000 people, is the country that generates the most sales within Latin America and represents 40% of the food retail sector’s total turnover. • The country is seen as one of the most promising ones for the retail industry due to its accelerated growth and constant increase of the GDP per capita in Brazil. • Brazil’s food retail industry includes a wide variety of formats –hypermarkets, supermarkets, discount, Price Club, mini-markets and wholesalers- offering the clients different styles when it comes to doing their shopping. In Brazil, the leading format is the supermarket, which represents approximately 82.4% of the total number of stores, followed by the discount concept –which represents just 8%-. • The Brazilian retail sector has growth, partly, because of the increase in square meters in the modern channel –which, during 2011, grew by 3%-. • As far as the Brazilian retail market’s concentration, the Top Ten retailers control 68.0% of the country’s modern channel. Source ILACAD World Retail

5. The Brazilian Retail in 2011The retail sector maintains its dinamics and becomes stronger • Brazil’s food retail sector is the most important one in Latin America, followed by Mexico and Argentina. During 2011, it registered sales of approximately USD$ 99,564 million, which represent an increase of 10.58% in comparison to the year before. • In Brazil, the industry’s modern channel ended the year with a total of 7,792 stores, out of which 20% belong to the market’s four main retailers. However, the store concentration is much less than the turnover concentration among companies, since the Ranking’s first four -Grupo Pão de Açucar, Carrefour, Walmart and Cencosud – controlled round 70% of the channel by the end of 2011. • During the year, the Brazilian food retail sector –which includes the operation of hypermarkets, supermarkets, Price Clubs, Cash & Carry, convenience stores, mini-markets and discount- grew by around 11% at current exchange rates and 3.82% at a constant rate in comparison to the year before. • Within the modern channel, the main retailer in 2011 was, for the third year in a row, Grupo Pao de Acucar -with a market share of 17.1%-, followed by French group Carrefour –which holds a market share of around 16.2%- and Walmart –with 14.1% of the market-. In the fourth spot we can see Cencosud, which has a market share of 3.6%. • During 2011, one of the most important and relevant news in Brazil’s food retail sector was the possible fusion between Pão de Açucar and Carrefour Brazil. However, and despite weeks of negotiations, the alliance was not concluded due to a strong opposition by Casino –partner of CBD in Brazil- and the withdrawal of the BNDES Bank, which was going to loan the money needed for the operation. Source: ILACAD World Retail

6. On the other hand, Chilean retailer Cencosud was responsible for two large acquisitions in Brazil: the purchase of the Supermercados Bahia chain and the acquisition of Supermercados Prezunic. These operations allowed to group to reach a larger presence and become more dynamic in the supermarket business segment and strengthen its position in the country. • The Brazilian market’s behavior confirmed the multi-channel trend, which means the client needs several shopping models. The same customer who can buy by the bulk may also need to do a quick shopping trip and get daily items. That is why many chains decided to redesign their strategies, like Pao de Acucar –which prioritize the Minimercados Extra format in order to offer its clients another shopping option-. • Moreover, Carrefour opened its first Planet hypermarket in Brazil, in the city of Santo Andre, Sao Paulo, which became the first store under this concept –which, according to the company, “is the new supermarket concept”-. Besides, the company’s President in the country, Luiz Fazzi, announced that the market strategy in Brazil would be based on the expansion of the Atacadao stores and the Planet hypermarkets. • Finally, one of the main players during the year was Dia%, which separated from Carrefour and will operate independently from now on. By the end of the year, it will control approximately 480 stores in Brazil. Source: ILACAD World Retail

7. Brazil Retail Market Facts – Modern Channel 194,933,000 12,916 6.5% *NOTA: The Modern Channel is made up by auto-service stores with over two check-out stations, keeping in mind the 500 retailers that make up the ABRAS ranking. Cash & Carry: includes the Wholesale and Atacarejo formats. Sources: ILACAD World Retail - ABRAS Population GDP per Capita Inflation

8. Retail Ranking in Brazil * The CBD results are made up by the Food Retail sector’s sales (GPA Alimentar)** Carrefour’s turnover excludes the Dia% operations in the country.*** Prezunic was acquired by Cencosud in 2011 but has not included the chain in its financial report s yet. Sources: ABRAS – Retailer’s Information

9. Fusions and Acquisitions 2010 Fusions and Acquisitions 2011 Source: ILACAD World Retail

10. Brazil: Food Retail Formats Denominations Modern Channel Traditional Channel Hypermarket: Stores of over 5,000 square meters in surface, with over 50 check-out stations. They offer more than 45,000 SKUs, both groceries and non-food items, as well as electronics, appliances and home goods. Neighborhood Store: Small proximity stores (100 sq. Meters). Very limited assortment. businesses (Atacado). Supermarket: Surfaces between 750 and 5,000 square meters, where between 7,000 and 20,000 SKUs are offered, both under groceries and non-food categories. Specialized Stores: Butcheries, Bakeries, etc. Discount Stores: Stores with sales areas of between 200 and 400 square meters. Basic assortment of products and lower prices than in other stores, focusing on private labels. Price Clubs: Format that sells products by the bulk through a membership system. Operates under low operational costs, recued assortment and low prices. The Modern Channel is made up of auto-service stores that have 2 or more check-out stations, considering the 500 retailers in the ABRAS rankins, reaching 7,792 stores. Overall, the number of stores considered by ABRAS –including the traditional auto-service stores- comes to 73,336 stores and a remaining total of 81,128. Wholesaler / Cash & Carry: Surfaces of over 9,000 square neters that sell products by the bulk,mainly to smaller businesses. Mini-markets: Surfaces of 250 square meters. They offer around 1,000 references, mainly under food categories. Atacarejo: Stores that sell to final customers (Varejo) and also wholesale to other Sources: ILACAD World Retail - ABRAS

11. Auto-Service Store Evolution by Format in Brazil (Modern Channel) • The total variation of stores had an increase of 3% during 2011, when 227 stores where opened, a much lower opening rate than 2010, when 1,882 stores were inaugurated. • The most dynamic format was the Discount concept –headed by Dia-, followed by the Supermarkets. Sources: Retailer’s Information, ABRAS, ILACAD World Retail

12. VARIATION 10.58% Annual sales at current rates (R$)* 0.80% 3.83% 7.36% Annual sales in dollars (U$S)* 10.58% Annual sales per square meters at constant rates (R$)* Annual sales per square meter at current rates (R$)* Total square meters Total number of stores +283,804 sq.m3-00% Sales per square meters in dollars +227 Stores 7.36% Annual sales at constant rates (R$)* Brazilian Retailers’ Total Evolution 2010 2011(Est.) 150,363 166,271 160,136 166,271 90,038 99,564 9,460,135 9,743,939 7,565 7,792 15,894.13 17,064.00 16,927.45 17,064.00 9,517 10,218 * Expresado en millones Source: ILACAD World Retail

13. 2. Key Account Analysis

14. USD$ 17,024 Grupo Pão De Açucar 1 • Pão de Açucar, the main retailer in Brazil, leads the Top Ten Ranking as the largest food retailer in the country, reaching sales for 28,431 million Real (USD$ 17,024.6 million) during 2011. • By September, the group operated a total of 626 stores in Brazil under different formats: supermarkets, hypermarkets, proximity stores and Cash & Carry. The number of stores makes Pao de Acucar the leader in the Brazilian market, of which it controls 17.1%. • In 2011, the company concluded the conversion process of 221 CompreBem and Sendas stores to the Extra banner. Likewise, it chose the Pão de Açucar and Extra brands for its food retail stores exclusively and the Assai in the wholesale segment. During the last few months, it launched a new format, Minimercados Extra, in order to offer a daily shopping alternative. They have started replacing the Extra Facil stores and will continue the conversion process during 2012. • As part of the strategic commercial plan, in 2011, Pão de Açucar Delivery inaugurated a new operational platform, which –according to the company- will increase the number of daily transactions ten times and allow the user to navigate the website faster because of a technological changes that were made. Besides, the company will launch –in 2012- a TV sales channel, taking their shopping experience to the digital era. Group’s turnover in 2011 (in millions) During 2012, the company will focus on a strong organic store expansion, after converting units in 2011. The group plans to open around 420 stores within the next three years, prioritizing the proximity format. Source: ILACAD World Retail – Retailer’s Information

15. USD$ 16,166 For the next ten years, the company’s market strategy will be based on the expansion of the Atacadao stores and the Planet hypermarkets. Carrefour 2 • French retailer Carrefour registered a turnover of 26,997.8 million Real in 2011, with represents an increase of 7.3% in comparison to the year before and allowed it to reach a market share of 16.2%. • In dollars, Carrefour reached sales of USD$ 16,166 million –allowing the retailer to maintain its second spot in the Food Retail Ranking-. Moreover, the income registered in the Brazilian operations represents the majority for the company within the region. • The group operates several store formats in Brazil and a total of 244 stores by the end of 2011. • One of the openings was made under the Carrefour Planet banner, a hypermarket model imported from France and launched in the city of Santo Tome, in Sao Paulo, becoming the first store under this concept in the city. According to the company, the Planet model is “the new supermarket concept”. • Moreover, in 2011, it was rumored Carrefour started fusion negotiations with Pao de Acucar but –at the last minute- it could not be concluded because of Casino’s refusal. If it had gone through, the whole retail sector in the country would have changed completely. Group’s turnover in 2011 (in millions) Source: ILACAD World Retail – Retailer’s Information

16. USD$ 14,053 Walmart 3 • Walmart holds, once again, the third spot in the Food Retail Ranking, after registering –in 2011- sales of 23,468 million Real (USD$ 14,053 million), which means they grew by 15% in relation to 2010. Moreover, the company reached a market share of 14.1%. • The chain operates in 18 Brazilian states in the southern, southeastern, center, western, northeaster and the capital city regions. It had a total of 511 stores by the end of December of 2011, 32 more than the ones it operated in 2010. • The retailer launched a new commercial model for the hypermarkets in Brazil: the Precio Bajo Todo Dia (PBTD) model (Low Prices, Everyday), which offers its clients prices up to 20% lower. Walmart expects to apply this strategy in the supermarkets as well. • At the Walmart stores in Brazil, the customers can access a 65,000 product assortment, out of which 19,000 belong to the group’s private label. Group’s turnover in 2011 (in millions) In 2011, Renzo Casillo –former President of Walmart’s division in Puerto Rico- was named Executive Vice President of Walmart Brazil. Source: ILACAD World Retail – Retailer’s Information

17. USD$ 3,208 Cencosud 4 • By the end of 2011, Cencosud registered sales of 5,967.1 million Real in Brazil, which represents an increase of 70.4% in comparison to the year before. It holds a market share of 3.6% This strong sales growth was caused by the acquisitions of the Super Familia, Perini and Bretas chains, made in 2010. • Moreover, in 2011, Cencosud concluded the total purchase of supermarket chain Prezunic for a sum of R$ 875 million (USD$ 497 million), gaining control of 31 stores and becoming leader in Rio de Janeiro. • During the same time, Cencosud acquired the Cardoso chain, with operates three Supermercados Bahia stores. • In November of 2011,the retailer operated 158 stores in the country -19 more in relation to 2010-. Group’s turnover in 2011 (in millions) In the beginning of 2011, Cencosud announced it would invest 210 million dollars in Brazil. Besides opening 13 stores, the company made two significant acquisitions. Source: ILACAD World Retail – Retailer’s Information

18. USD$ 1,742 Zaffari 5 • Zaffari reached sales of approximately 2,910 million Real by the end of 2011, which represents an increase of 16.8% in comparison to the year before. • In 2011, Zaffari had a market share of 1.8% and maintained the fifth spot in Brazil’s Food Retail Ranking, same position it held last year. • The Brazilian company operated 29 stores by the end of the year, which are located in Rio Grande do Sul and São Paulo. • Zaffari invested around 200 million Real in Brazil in 2011, which were used for the opening and remodeling of stores. Group’s turnover in 2011 (in millions) Source: ILACAD World Retail – Retailer’s Information

19. USD$ 1,549 Día% 6 • In 2011, Dia% registered sales of 2,881.3 million Real (USD$ 1,549 million), which represents an increase of 16.7% in comparison to the year before and a 13.8% growth in dollars. • By the end of the year, the retailer operated a total of 480 stores, 72 more than by the end of 2010. • Dia if one of the main discount chains in the country and, operating 480 stores with average surfaces of approximately 400 square meters each.. • At the stores, clients will be able to find a wide assortment of products, especially private label items –which represent around 30% of the chain’s total turnover. Group’s turnover in 2011 (in millions) Source: ILACAD World Retail – Retailer’s Information

20. USD$ 1,589 Prezunic 7 • Brazilian chain prezunic registered sales of 2,653.5 million Real last year, around 8.35% more than the year before. • Prezunic held the seventh spot in Brazil’s Top Ten Ranking and has a market share of 1.6%. • The company, which operates stores in Rio de Janeiro –where it leads the retail sector-, has a network of 31 centers. In 2011, it opened only one supermarket. a • In November 0f 2011, Cencosud announced it had purchased Prezunic and, starting in January of 2012, the company will become part of the Chilean retailer’s network. The acquisition cost around R$ 875 million (USD$ 497 million) and represents Cencosud’s entrance to Rio de Janeiro’s market. Group’s turnover in 2011 (in millions) By the end of 2011,Prezunic was acquired by Chilean group Cencosud and, in January, it will begin operating the 31 stores in Rio de Janeiro. Source: ILACAD World Retail – Retailer’s Information

21. USD$ 1,382 Irmaos Muffato 8 • In 2011, Irmaos Muffato reached sales of over 2,308.7 million Real (USD$ 1,382 million), 19.8% more in relation to the company’s sales in 2010. • By the end of 2011, Irmaos Muffato operated a total of 40 stores, both supermarkets and hypermarkets. During the year, the retailer inaugurated a total of nine stores. • Throughout the years, the company maintained its position among Brazil’s top 10 food retailers, controlling around 1.4% of the country’s market share. • In 2011, Irmaos Muffato opened a distribution center in Londrina, increasing the company’s commercial reach. • Likewise, the retailer entered the e-commerce business in order to maximize its sales. Group’s turnover in 2011 (in millions) Source: ILACAD World Retail – Retailer’s Information

22. USD$ 1,296 A. Angeloni 9 • A. Angeloni ended 2011 with sales of around 2,165 million Real,19.4% more in comparison to its turnover in 2010. • By the end of 2011, A. Angeloni operated a total of 24 stores in the country and made no openings during the year. • The company held the ninth spot in the Food Retail Ranking once again, controling 1.3% of Brazil’s food retail sector. Group’s turnover in 2011 (in millions) Source: ILACAD World Retail – Retailer’s Information

23. USD$ 1,279 Supermercados Condor 10 • Supermercados Condor holds the tenth spot in the Food Retail Ranking in Brazil. In 2011, it registered sales of 2,136.5 million Real, an increase of 23.6% in relation to 2010. • Likewise, by the end of 2011, the company had a network of 33 stores, two more in comparison to the end of the year before. • The chain had a market share of 1.3% of the sector in 2011, maintaining the same position in the Food Retail Ranking as last year. • Condor supermarkets have an average surface of 3,300 square meters, where clients can find a wide assortment of products. • In 2012, the group plans to open two hypermarkets in Curitiba and Pinhas, in order to expand their presence in the region and increase their client base. Group’s turnover in 2011 (in millions) Source: ILACAD World Retail – Retailer’s Information