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  As Of               Filer                 Filing     As/For/On Docs:Pgs              Issuer               Agent

 6/30/03  Distribution & Service D&S SA     20-F       12/31/02    7:243                                    Bowne of NY City...01/FA

Document/Exhibit                   Description                      Pages   Size 

 1: 20-F        Annual Report of a Foreign Private Issuer           HTML  1,586K 
 2: EX-1.1      Amended Bylaws                                      HTML     47K 
 3: EX-8.1      List of Subsidiaries                                HTML      7K 
 4: EX-12.1     Certification                                       HTML      7K 
 5: EX-12.2     Certification                                       HTML      6K 
 6: EX-12.3     Minutes of the Extraordinary Shareholders Meeting   HTML    119K 
 7: EX-12.4     Offering Circular                                   HTML    105K 

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United States

SECURITIES AND EXCHANGE COMMISSION

FORM 20-F

(Mark One)

OR

For the fiscal year ended December 31, 2002

OR

Commission file number 333-7616

Distribución y Servicio D&S S.A.

(Exact name of Registrant as specified in its charter)

Distribution and Service D&S Inc.

(Translation of the Registrant’s name in English)

The Republic of Chile

Avenida Presidente Eduardo Frei Montalva 8301
Quilicura
Santiago, Chile
(56-2) 200-5000
(Address and telephone number of principal executive offices)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Securities registered or to be registered pursuant to Section 12(g) of the Act: None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

     Common Stock, with no par value: 1,380,000,000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

x Yes    o No

Indicate by check mark which financial statement item the registrant has elected to follow.

o  Item 17     x  Item 18

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INTRODUCTION

     Distribución y Servicio D&S S.A. is a corporation organized under the laws of Chile. We completed our initial public offering of common shares in Chile in December 1996. We listed our common shares on the New York Stock Exchange under the symbol “DYS” and completed an initial public offering of ADSs in the United States in October 1997. We also listed our common shares on the Madrid Stock Exchange in December 2002. Our principal executive offices are located at Avenida Presidente Eduardo Frei Montalva 8301, Quilicura, Santiago, Chile, and our telephone number is 011-562-200-5000.

Special Note Regarding Forward-Looking Statements

     This annual report contains forward-looking statements that involve risks and uncertainties. These forward-looking statements appear throughout this annual report, including, without limitation, under Item 3— “Key Information — Risk Factors,” Item 4— “Information on the Company” and Item 5 — “Operating and Financial Review and Prospects”. These forward-looking statements relate to, among other things:

	•		our business model,
	•		our strategy,
	•		any acquisitions or divestitures,
	•		any plans for entering into strategic relationships and joint ventures,
	•		any new store openings,
	•		our expectations regarding ongoing litigation,
	•		financings and capital increase,
	•		the performance of the Chilean economy, and
	•		other expectations, intentions and plans contained in this annual report that are not historical fact.

     When used in this annual report, the words “expects,” “anticipates,” “intends,” “plans,” “may,” “believes,” “seeks,” “estimates” and similar expressions generally identify forward-looking statements These statements reflect our current expectations. They are subject to a number of risks and uncertainties, including, but not limited to, unforeseen competitive pressures, Chilean economic conditions and changes in the marketplace. In light of the many risks and uncertainties surrounding our marketplace, you should understand that we cannot assure you that the forward-looking statements contained in this annual report will be realized.

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PRESENTATION OF FINANCIAL AND CERTAIN OTHER INFORMATION

     Unless otherwise specified, references herein to “dollars,” “U.S. dollars” or “US$” are to United States dollars; references to “pesos,” “Chilean pesos” or “Ch$” are to Chilean pesos; references to “UF” are to Unidades de Fomento, a daily indexed Chilean peso-denominated monetary unit that takes into account the effect of the Chilean inflation rate of the previous month. Certain amounts contained herein may not total due to rounding. Unless otherwise specified, our financial data is presented herein in constant Chilean pesos of December 31, 2002 purchasing power.

     As used in this Annual Report, “supermarket” means a retail store that sells different foodstuffs and household items, each of which is referred to as a stock keeping unit, or SKU, and that has three or more checkout counters. This definition is consistent with the definition of “supermarket” used by the Chilean Instituto Nacional de Estadísticas (Chilean National Institute of Statistics), or INE. One meter equals 3.2808 feet or 1.0936 yards and one square meter equals 10,7639 square feet. The term “net revenues” as used herein includes:

	•		product sales attributed to our retail operations;
	•		fees received from suppliers for access to selling spaces, in the form of rebates, special promotions or payments upon opening new stores (together, “supplier fees”);
	•		revenues from our concessionaires in each store; and
	•		revenues from our credit card operations, in each case, net of the value added taxes, or VAT, paid by the consumer.

     In the presentation of results by format, the contributions to net revenues are included in the store format to which they were attributable. The term “sales,” as used herein, is distinct from “net revenues,” and is limited to product sales (net of value added tax) attributed to our retail operations.

     Chile is divided into political subdivisions, each called a “Region”. The Regions are denominated by Roman numerals (i.e., I-XIII), except for the Region which encompasses the capital, Santiago, which is called the Santiago metropolitan region or SMR.

     Information contained in this Annual Report regarding annual volume, per capita growth rates and levels, market share, product segment, and population data in the supermarket industry has been computed by us based upon market statistics. Sales figures for the supermarket industry in Chile, which are based upon industry surveys and information reported to INE, are based on data supplied by the A.C. Nielsen Company. Additional data was obtained from third parties and from our own research. We believe that our estimates are reliable, but they have not been confirmed by independent sources.

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PART I

Item 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

     Not applicable.

Item 2. OFFER STATISTICS AND EXPECTED TIMETABLE

     Not applicable.

Item 3. KEY INFORMATION

     The following table presents our selected consolidated and other financial and operating information at the dates and for the periods indicated. The selected financial information for the years ended December 31, 2000, 2001 and 2002, was derived from and should be read in conjunction with, our consolidated financial statements, including the notes thereto, included elsewhere in this Form 20-F, which were audited by Deloitte & Touche, independent accountants. Our consolidated financial statements are prepared in accordance with Chilean GAAP, which differs in certain significant respects from U.S. GAAP. Note 24 to our consolidated financial statements provides a description of the principal differences between Chilean GAAP and U.S. GAAP as they relate to us and a reconciliation to U.S. GAAP of net income and total shareholders’ equity for the periods and as of the dates covered thereby.

     As required by Chilean GAAP, our financial statements are adjusted to reflect changes in purchasing power of the Chilean peso due to inflation. These changes are based on the consumer price index, or CPI, measured from December 1 to November 30 of each year. Chilean GAAP requires monetary assets and liabilities to be translated at year-end rates of exchange, non-monetary assets and liabilities to be translated at historical rates of exchange as of the date of acquisition or incurrence, as the case may be, and income and expense accounts to be translated at the average monthly exchange rate for the month in which they are recognized.

     For the convenience of the reader, this Form 20-F contains translations of certain Chilean peso amounts into U.S. dollars at specified rates. Unless otherwise indicated, U.S. dollar equivalent information for amounts in Chilean pesos is based on the Observed Exchange Rate (as defined herein under “Exchange Rates in Chile”) reported by the Banco Central de Chile (the “Central Bank of Chile” or the “Central Bank”) for December 31, 2002, which was Ch$718.61 = US$1.00. The Federal Reserve Bank of New York does not report a noon buying rate in New York City for Chilean pesos. No representation is made that the Chilean peso or U.S. dollar amounts shown in this Form 20-F could have been or could be converted into pesos or U.S. dollars, as the case may be, at any particular rate or at all.

     Our consolidated financial results for the year ended December 31, 1999 included the results of Ekono-Argentina through November 30, 1999, at which time it was sold to Disco S.A., an Argentine supermarket company, controlled by Royal Ahold, the Netherlands-based retailer. Ekono-Argentina accounted for 10.8% of our net revenues for 1999. At the time of acquisition, in December 1999, Disco S.A. made a cash payment of US$60 million and agreed to pay US$90 million in May 2003, an obligation that was guaranteed by Disco Ahold International Holdings N.V., now a wholly-owned subsidiary of Royal Ahold. In December 2002, Royal Ahold, through its general counsel, communicated to us its intention to submit this obligation to the Argentine regulatory rules on currency convertibility, which provide that U.S. dollar obligations for instruments governed by Argentine law may be satisfied by payment in Argentine peso on a one-to-one basis. On May 2, 2003 Disco S.A. paid to our company the Argentine peso equivalent of the obligation, or US$38 million, effectively defaulting on the obligation, both in the currency of payment as well as in the amount thereof.

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     Our company has steadfastly rejected the applicability of the Argentine currency convertibility regime to Disco S.A. and to Disco-Ahold International Holdings N.V., the guarantor, a non-Argentine entity, as to this obligation (which was explicitly undertaken to be a U.S. dollar obligation). We have retained counsel in Chile, Argentina and the Netherlands and have commenced legal actions against the guarantor, Disco-Ahold International Holdings N.V., in the Netherlands Antilles, and against its parent, Royal Ahold, in the Netherlands, in order to collect the defaulted amount.

     If our legal actions are unsuccessful, we will incur an extraordinary loss of US$52 million.

     Subsequent to the issuance of our 2001 financial statements, we determined that it was appropriate to restate the U.S. GAAP data presented for 1999 through 2001 for the following reasons:

     The effect of these adjustments on our net income and shareholders’ equity under U.S. GAAP is described in note 24.b.6 to the financial statements.

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Exchange Rates

     Chile’s Ley Orgánica Constitucional del Banco Central de Chile Nº 18,840 (the “Central Bank Act”), enacted in 1989, relaxed restrictions on buying and selling foreign currencies in Chile. Prior to 1989, the law authorized the purchase and sale of foreign currencies in only those cases explicitly authorized by the Central Bank.

     The Central Bank Act provides that the Central Bank of Chile (“the Central Bank”) may determine that certain purchases and sales of foreign currencies specified by law must be carried out in the market formed by banks and other institutions authorized by the Central Bank for such purposes (the “Formal Exchange Market”). The Central Bank reports an exchange rate (“Observed Exchange Rate”) which for any given date is computed by averaging prices from the previous day’s transactions in the Formal Exchange Market. Banks and other institutions may effect purchases and sales of foreign currencies in the Formal Exchange Market at such rates as they freely determine from time to time.

     Since 1989, the Central Bank has also made use of a referential daily rate (“Reference Exchange Rate”) that factors in domestic and foreign inflation as well as variations in the parity between the peso and the U.S. dollar, the Euro and the Japanese yen. As of December 30, 2002, the Reference Exchange Rate was Ch$549.08 to US$1.00. The Central Bank buys or sells foreign currency in the Formal Exchange Market to maintain the average exchange rate within certain limits. In order to promote exchange rate flexibility, however, as of September 2, 1999, the Central Bank decided to suspend its formal commitment to intervene in the foreign exchange market to maintain the limits on the range of exchange rates. It was, therefore, agreed that the Central Bank would intervene in the exchange rate market only in exceptional cases and that it would report such decisions. The Central Bank will continue to calculate and publish the daily referential exchange rate according to the regulations in effect as a medium-term benchmark for the market and for its use in contracts still in effect with that exchange rate.

     The Central Bank has ruled that certain foreign currency transactions, including those transactions associated with foreign investment, may be effected only through the Formal Exchange Market. While authorized to effect transactions within a given pre-established range of exchange rates surrounding the Reference Exchange Rate, the Central Bank operates at the cash rate.

     Foreign exchange transactions that may be effected outside the Formal Exchange Market can be carried out in the so-called Mercado Informal (the “Informal Exchange Market”), which is an accepted currency market in Chile. There are no limits imposed on the extent to which the rate of exchange in the Informal Exchange Market can fluctuate above or below the Observed Exchange Rate.

     The following table sets forth the high, low, average and year-end Observed Exchange Rates for U.S. dollars for the periods indicated as expressed in pesos per US$1.00, as reported by the Central Bank. No indication is made that the Chilean peso or U.S. dollar amounts referred to in this annual report actually represent, could have been or could be converted into, U.S. dollars or Chilean pesos, as the case may be, at the rates indicated, at any particular rate or at all. The Federal Reserve Bank of New York does not report a daily 12:00 P.M. buying rate for Chilean pesos:

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     Source: The Central Bank.

     The Chilean government’s economic policies and any future changes in the value of the Chilean peso against the U.S. dollar could have a material adverse effect on the dollar value of an investor’s return on investment. The Chilean peso has been subject to large devaluations in the past and may be subject to significant fluctuations in the future.

     Cash distributions with respect to shares of Common Stock received by the Depositary will be received in Chilean pesos. The Depositary will attempt to convert such pesos to U.S. dollars at the then-prevailing exchange rate for the purpose of making dividend and other distribution payments with respect to the ADSs. If the value of the Chilean peso falls relative to the U.S. dollar between the declaration of dividends on the Common Stock and the distribution of such dividends by the Depositary, the amount in U.S. dollars distributed to holders of ADRs will decrease. Consequently, the value of the ADSs and any distributions to be received from the Depositary could be materially adversely affected by reductions in the value of the peso relative to the dollar.

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RISK FACTORS

     An investment in our common shares involves a high degree of risk. Investors in our common shares should carefully consider the following risk factors and the other information in this annual report.

Risks Relating to Our Company

     Increased competition may adversely affect our results of operations.

     The retail food industry in Chile is characterized by growing competition and increasing pressure on profit margins. The number and type of competitors and the degree of competition experienced by individual stores vary by location. Competition occurs on the basis of price, location, quality of products, service product variety and store conditions. Through our different store formats, we compete across the full spectrum of food retailing in Chile with a number of national hypermarket and supermarket chains, smaller chains and unaffiliated independent food stores. International food retailers arrived in Chile in 1998 when Carrefour (France) opened its first store. Additionally, Ahold arrived through a joint venture with owners of Disco-Velox, who were the owners of Santa Isabel. In addition, it is likely that certain international food retailers may elect to participate in the Chilean market through joint ventures with national food retailers or through the acquisition of significant shareholdings in national food retailers. In Chile, we and our principal competitors have all announced expansion and modernization plans that are likely to result in our adopting more aggressive pricing policies at affected store locations. Additionally, there has been a consolidation process in the Chilean supermarket industry. Jumbo has purchased Santa Isabel from Ahold, to bolster its participation in the supermarket format. Also, some companies in other areas of the retail industry in Chile are expanding into other retail areas (including, for example, the merger of Falabella and Sodimac, a department store and home improvement store respectively). These developments will likely create opportunities for mergers and acquisitions. Our company intends to avail itself of future opportunities for growth.

     Increasing competition may cause us to lower our prices and take other actions that adversely affect our profitability, compel us to reduce our planned capital expenditures or otherwise forego growth opportunities. Some of our competitors and potential competitors in Chile have greater financial resources than we do and could use these resources to take steps which could adversely affect our financial condition and competitive position. Although our management believes that we currently compete effectively in our industry and maintain a position of market leadership, there can be no assurance that future competition will not materially and adversely affect our business, financial condition, results of operations, cash flows or prospects.

     The Ibáñez family owns a substantial majority of our share capital and exercises significant influence over board decisions.

     At December 31, 2002, Mr. Manuel Ibáñez Ojeda and his sons, Felipe Ibáñez Scott and Nicolás Ibàñez Scott, our controlling shareholders, controlled, directly or indirectly, 75.68% of our outstanding capital stock. Therefore, our controlling shareholders are in a position to direct our management and to determine the result of substantially all matters to be decided by a shareholder’s vote, including the election of a majority of the members of the board of directors, the determination of the amount of dividends we distribute (subject to the legally mandated minimum of 30% of net income), the ability to control persons named to our Executive Committee and management, the acquisition or disposition of assets, future issuance of shares or other securities and other management policies. In addition, if no voting instructions are received by the Depositary (as defined in Item 10 — “Additional Information—The Deposit Agreement”) from a holder of American Depositary Shares, or ADSs, on or before the date established by the Depositary for such purpose, such holder shall be deemed, and the Depositary shall

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deem such holder, to have instructed the Depositary to give a discretionary proxy with full power of substitution to the President of our board of directors, or to a person designated by the President of our board of directors, to vote such shares on any such matter described under Item 10 — “Additional Information—Other Limitations”. For information on the Depositary Agreement, see Item 10 — “Additional Information—The Deposit Agreement”.

     The decision of the Ibáñez family to dispose of a significant number of its shares could adversely affect the trading price of the shares and ADSs.

     Because the Ibáñez family controls 75.68% of our capital stock, the disposition by them of a significant number of their shares, or the perception that such a disposition might occur, could adversely affect the trading price of the shares on the Chilean Stock Exchanges (and, consequently, the trading price of the ADSs). We cannot assure you that the Ibáñez family will continue to own a controlling percentage of our capital stock or that a reduction in their ownership percentage would not have an adverse effect on our results of operations or financial condition.

     The growth of our credit card operations may expose us to increased credit and financial risk and may adversely affect our credit portfolio, financial condition and results of operations.

     We continue to expand the operations of Presto, our in-store credit card, both in terms of the numbers of accountholders and the credit products offered. Presto is currently offered in all of our 62 Chilean store locations existing at December 31, 2002, that is, in four Almac stores, 23 Ekono stores, 21 Lider stores, all 13 Lider Vecino stores, and our Lider Mercado store (our newest hypermarket format launched in 2001). We assume sole responsibility for account approval and credit risk by administering Presto as a separate operating unit. Subject to our credit standards, we are seeking to increase the in-store credit available to our customers, particularly to permit the purchase of more expensive, higher margin, durable goods. As a result, our credit card operations accept a significant portion of applicants otherwise rejected by credit card operations administered by local banks. This expansion of credit card operations represents our first entry into the provision of financial services and an assumption by us of new credit risks and financial risks where we previously have had no direct experience. There can be no assurance that the continued expansion of our credit card operations (including our assumption of account approval and credit risk) will not result in a deterioration of the credit portfolio of Presto or that other factors, including macroeconomic factors, will not adversely affect our business, financial condition, results of operations, cash flows or prospects.

     If we are unable to access capital markets in the future, our financial condition and results of operations may be adversely affected.

     There can be no assurance that we will be able to generate sufficient cash flows from our operations or obtain sufficient funds from external sources to fund our capital expenditure requirements. Our future ability to access financial markets in sufficient amounts and at acceptable costs to finance our operations and fund our proposed capital expenditures will depend to a large degree on prevailing capital and financial market conditions over which we have no control, and, accordingly, there can be no assurance that we will be able to do so. Failure to generate sufficient cash flows or to obtain such financing could result in the delay or abandonment of some or all of our planned expenditures, which, in turn, could adversely affect our competitive position, financial condition, results of operations, cash flows and prospects.

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     The default on the payment of the deferred amount of the purchase price for Ekono-Argentina may adversely affect our financial condition and results of operation.

     Due to the sale of Ekono-Argentina to Disco S.A. in December of 1999 for US$150 million, our direct exposure to Argentine risk has been limited. However, only US$60 million of the purchase price for our Argentine operations was paid in May 2000, with the balance of US$90 million payable in May 2003. We benefit from a guarantee on the deferred amount by the Netherlands Antilles Company “Disco-Ahold International Holdings N.V.” We were informed in December 2002 that Disco S.A. would not pay us the entire US$150 million amount in dollars, but would instead convert the US$90 million balance owed to us into Argentine pesos under Argentine dollar convertibility regulations. On May 2, 2003, Ahold made payment of 126 million Argentine pesos, the equivalent of US$45 million, based on an effective exchange rate of 2.8 Argentine pesos to 1 U.S. dollar. This amount remitted by Ahold remains in Argentina. We are seeking approval from the Central Bank of Argentina to remit this amount to Chile. We do not accept Ahold’s attempt to reduce our balance due under the Argentine convertibility regime. Moreover, we are currently pursuing claims against the guarantor, Disco-Ahold International Holdings N.V., in the Netherlands Antilles; as well as Royal Ahold, the parent company of the guarantor, in the Netherlands. Although we believe that our claim against Disco – Ahold International Holdings N.V. and Royal Ahold will ultimately succeed, should our claim fail and the default in the payment on such deferred amount continue unabated, the result will adversely affect our financial condition.

     You may be unable to exercise preemptive rights.

     Chilean law requires us, whenever we issue new capital stock for cash, to grant preemptive rights to all holders of our capital stock, giving them the right to purchase a sufficient number of shares to maintain their existing ownership percentage. However, we may not be able to offer shares to U.S. holders of ADSs pursuant to preemptive rights granted to our shareholders in connection with future issuances of capital stock, thereby subjecting the ADS holders to potential dilution.

     In May 1997, the Chilean foreign exchange procedure, which must be complied with in relation to any subscription of rights and delivery of ADRs to holders of ADSs, was amended. Under the new procedures established by the Central Bank, a Chilean company with an existing ADS program may apply to the Central Bank to amend its Foreign Investment Contract (which will also be deemed to incorporate all laws and regulations applicable to international offerings in effect as of the date of the amendment) so as to extend the benefits of such contract to new shares issued pursuant to preemptive rights offerings to existing ADS holders. Any such amendment (which will be deemed to incorporate all laws and regulations applicable to international offerings in effect as of the date of the amendment) will be reviewed by the Central Bank on a case-by-case basis. These procedures are expected to make it easier for Chilean companies to offer preemptive rights to ADS holders in connection with capital increases.

     Nevertheless, we may not be able to offer shares to U.S. holders of ADSs pursuant to preemptive rights granted to our shareholders unless a registration statement under the Securities Act is effective with respect to such rights and shares, or an exemption from the registration requirements of the Securities Act is available. At the time of any future offerings of shares, we intend to evaluate the costs and potential liabilities associated with any such registration statement, the indirect benefits to us of enabling U.S. holders of ADSs to exercise preemptive rights, and any other factors that we consider appropriate at the time, before making a decision as to whether to file such registration statement. We cannot assure you that any such registration statement would be filed.

     To the extent that holders of ADSs are unable to exercise such rights because a registration statement has not been filed, the Depositary will attempt to sell such holders’ preemptive rights and distribute the net proceeds of the sale (net of the Depositary’s fees and expenses) to the holders of the ADSs, provided that a secondary market for such rights exists and a premium can be recognized over the

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cost of any such sale. A secondary market for the sale of preemptive rights can be expected to develop if the subscription price of the shares upon exercise of the rights is below the prevailing market price of the shares. In addition, Chilean income tax law provides a tax deduction to an individual resident taxpayer in an amount equal to a percentage of the individual’s investment in newly issued shares. Amounts received in exchange for the sale or assignment of preemptive rights relating to shares will be taxable in Chile and the United States. If such rights cannot be sold, they will expire and holders of ADSs will not realize any value from the grant of such preemptive rights. In either case, the equity interest in our company of the holders of ADSs would be diluted proportionately. We cannot assure you that a secondary market of preemptive rights will develop in connection with any future issuance of shares or, that if such a market does develop, a premium can be realized on their sale.

     You may be unable to receive share dividends.

     Chilean law provides that we can declare a dividend in cash or in shares. When a share dividend is declared above the legal minimum (which minimum must be paid in cash), we have the option to declare that the portion of the dividend above the legal minimum be paid either in shares or in cash. In the event that a share dividend is declared, U.S. holders of ADSs may not be permitted to receive such a dividend in shares unless a registration statement under the Securities Act is effective with respect to such shares, or an exemption from the registration requirements of the Securities Act is available. In the event that we shall offer or cause to be offered a dividend in shares to the U.S. holders of ADSs, or an option to elect to receive dividends in shares instead of cash, we agreed to consult with the Depositary to determine whether it is lawful and feasible to make such option available to U.S. holders of ADSs and, if such share dividend or option is to be made available to such holders, the procedures to be followed. In the event that we determine with the Depositary that such share dividend or option cannot be offered to U.S. holders of ADSs, the Depositary will sell such shares or elect to receive cash if such option is available and allocate the proceeds of such sale, or such cash, for the account of such ADS holders. The inability of all or certain U.S. holders of ADSs to receive dividends in shares could result in such holders not maintaining their percentage ownership of our common stock following the payment of dividends in shares unless such holder makes additional market purchases of ADSs.

Risks Relating to Chile

     Our growth and profitability depend on the level of economic activity in Chile and other emerging markets.

     At December 31, 2002, all of our assets were located in Chile. Since our sale of our Argentine operations in December 1999, all of our revenues have originated in Chile. Retail food sales show a high degree of correlation with the economic situation prevailing in the relevant market. Accordingly, our financial condition and results of operations are dependent to a significant extent upon economic conditions prevailing in Chile.

     The main Chilean economic indices for 2002 show:

	•		GDP increased 2.1%;
	•		internal consumption increased 1.4%;
	•		unemployment remained at 9%; and
	•		total supermarket sales increased 7.3%, but same store sales decreased by 2.6%.

     Our financial condition and results of operations could also be adversely affected by changes over which we have no control, including:

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	•		the economic or other policies of the Chilean government, which has a substantial influence over many aspects of the private sector;
	•		other political or economic developments in or affecting Chile; and
	•		regulatory changes or administrative practices of Chilean authorities.

     Our financial condition and results of operations also depend to some extent on the level of economic activity in both Latin American and other countries, especially the United States and certain nations in Asia. Although economic conditions are different in each country, investors’ reactions to developments in one country may affect the securities of issuers in other countries, including Chile.

     The economic problems encountered by Argentina may have an adverse effect on the Chilean economy and on our results of operations and the share price of our ADSs and shares.

     Argentina’s insolvency and recent default on its public debt, which deepened the existing financial, economic and political crises in that country, could adversely affect Chile, the market value of our shares and ADSs, or our business. The current Argentine president, Néstor Kirchner, took office on May 25, 2003, after his predecessor as president, Eduardo Duhalde, took office on January 6, 2002 in the midst of significant political unrest and after a series of interim presidents and administrations came to power following the resignation of President Fernando de la Rua in December 2001. The devaluation of the Argentine peso will continue to have a material adverse effect on Argentina and presents risks that the Argentine financial system may collapse and that substantial inflation may occur. The Argentine government prohibited Argentine debtors from servicing their external debt without Argentine Central Bank approval. If Argentina’s economic environment does not improve, the economy of Chile, as both a neighboring country and a trading partner, could also be affected and could experience slower growth than in recent years.

     Securities prices of Chilean companies are, to varying degrees, influenced by economic and market considerations in other emerging market countries and by the U.S. economy. We cannot assure that the Argentine economic crisis will not have an adverse effect on Chile, the price of our shares and ADSs, or our business.

     Currency fluctuations could adversely affect our financial condition and results of operations and the value of our shares and ADSs.

     The Chilean government’s economic policies and any future changes in the value of the Chilean peso against the U.S. dollar could affect the dollar value of our common stock and our ADSs. The peso has been subject to large devaluations in the past and could be subject to significant fluctuations in the future. In the period from December 31, 1998 to December 31, 2002, the value of the Chilean peso relative to the U.S. dollar decreased approximately 52.1%, as compared to a 16.1% decrease in value in the period from December 31, 1995 to December 31, 1998. The observed exchange rate on May 31, 2003 was Ch$714.1 = U.S.$1.00. Our results of operations may be affected by fluctuations in the exchange rates between the peso and the dollar despite Chilean regulations relating to the general avoidance of material exchange rate mismatches.

     No assurances can be given that the regulations referred to in the preceding paragraph will continue. In the absence of such regulations, and in the event of a devaluation of the peso, the financial condition and results of operations of Chilean companies, including us, and the ability of Chilean companies, including us, to meet obligations in foreign currencies, could be adversely affected. The Chilean government’s economic policies and future fluctuations in the value of the peso against the U.S.

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dollar could adversely affect our operating results and the dollar value of an investor’s return on an investment in the ADSs.

     Chilean trading in the shares of our common stock that underlie our ADSs will be conducted in pesos. Cash distributions with respect to shares of our common stock will be received in Chilean pesos by the depositary and converted by the depositary into U.S. dollars at the then-prevailing exchange rate for the purpose of making payments in respect of our ADSs. If the value of the Chilean peso falls relative to the U.S. dollar, the value of our ADSs and any distributions to be received from the depositary would be adversely affected. In addition, the depositary will incur customary currency conversion costs (to be borne by the holders of our ADSs) in connection with the conversion and subsequent distribution of dividends or other payments.

     Inflation could adversely affect our financial condition, results of operations and the value of our shares and ADSs.

     Although Chilean inflation has moderated in recent years, Chile has experienced high levels of inflation in the past. High levels of inflation in Chile could adversely affect the Chilean economy and have a material adverse effect on our financial condition and results of operations. The annual rates of inflation (as measured by changes in the CPI and as reported by the INE) in 1997, 1998, 1999, 2000, 2001 and 2002 were 6.0%, 4.7%, 2.3%, 4.5%, 3.1% and 3.0%, respectively. We cannot assure you that Chilean inflation will not increase significantly. We generally pass on our increased costs resulting from inflation to our customers through increases in the prices of the products we sell. There can be no assurance, however, whether or to what extent we will pass on increased costs in the future. Further, there can be no assurance that the performance of the Chilean economy, our operating results or the value of the ADSs will not be adversely affected by continuing or increased levels of inflation or that Chilean inflation will not increase significantly from the current level.

     The market for our shares may be volatile and illiquid.

     The Chilean securities markets are substantially smaller, less liquid and more volatile than major securities markets in the United States. The companies listed on the Santiago Stock Exchange, which is Chile’s principal exchange, had an aggregate equity market capitalization of approximately Ch$34,272,528 million (US$47,693 million) at December 31, 2002 and an aggregate average monthly trading volume of approximately US$284 million for 2002. The ten largest companies in terms of market capitalization at December 31, 2002, represented approximately 47% of the Santiago Stock Exchange’s aggregate market capitalization. Daily share trading volumes on the Santiago Stock Exchange are on average substantially lower than those on the principal national securities exchanges in the United States. For 2002, approximately 10% of the securities listed and traded on the Santiago Stock Exchange traded on 90% or more of the trading days.

     In addition, the Chilean securities markets may be affected by developments in other emerging markets, particularly other countries in Latin America.

     Chile imposes controls on foreign investment and repatriation of investments that may affect your investment in, and earnings from, our ADSs.

     Equity investments in Chile by non-Chilean residents generally are subject to various exchange control regulations that restrict the repatriation of investments and earnings therefrom. The ADS facility, however, is the subject of a Foreign Investment Contract among the Depositary, us and the Central Bank, which grants the Depositary and the holders of the ADSs access to Chile’s Mercado Cambiario Formal, or Formal Exchange Market. Pursuant to current Chilean law, the Foreign Investment Contract may not be amended unilaterally by the Central Bank. Additionally, there are judicial precedents (although not

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binding on future judicial decisions) indicating that the Foreign Investment Contract may not be abrogated by future legislative changes. There can be no assurance, however, that additional Chilean restrictions applicable to the holders of ADSs, to the disposition of underlying shares of Common Stock or to the repatriation of the proceeds from such disposition could not be imposed in the future, nor can there be any assessment of the duration or implications of any such restrictions that might be imposed. If, for any reason, including changes in the Foreign Investment Contract or Chilean law, the Depositary was unable to convert pesos to U.S. dollars, investors might receive dividends or other distributions in pesos. Transferees of shares withdrawn from the ADS facility will not be entitled to access the Formal Exchange Market unless the withdrawn shares are redeposited with the Depositary.

     Cash and property dividends paid by us with respect to ADSs held by a foreign (non-Chilean) holder will be subject to a 35.0% Chilean withholding tax, which is withheld by our company. Stock dividends are not subject to Chilean taxation.

     Chile has different corporate disclosure, governance and accounting standards than those you may be familiar with in the United States.

     The securities laws of Chile which govern open or publicly listed companies, such as our company, impose disclosure requirements that are more limited than those in the United States in certain important respects. In addition, although Chilean law imposes restrictions on insider trading and price manipulation, the Chilean securities markets are not as highly regulated and supervised as the U.S. securities markets. There are also important differences between Chilean and U.S. accounting and financial reporting standards. As a result, Chilean financial statements and reported earnings generally differ from those reported based on U.S. accounting and reporting standards. See Note 24 to our audited financial statements for a description of the principal differences between Chilean GAAP and U.S. GAAP as they relate to us and a reconciliation to U.S. GAAP of net income and total shareholders’ equity for the periods and as of the dates therein indicated.

     Pursuant to Chilean Companies Law No. 19.705, enacted in December 2000, the controlling shareholders of a Chilean open stock corporation can only sell their controlling shares through a tender offer issued to all shareholders in which the bidder would have to buy all the offered shares up to the percentage determined by it, when the price paid is substantially higher than the market price (that is, when the price paid was higher than the average market price of a period starting 90 days before the proposed transaction and ending 30 days before such proposed transaction, plus 10%). Transitory Article 10 of Law No. 19.705 established a term of three years during which the controlling shareholders of an open stock corporation would be authorized to sell their controlling shares directly to a third party without requiring a tender offer to all shareholders, provided that such authorization was granted by a general shareholders’ meeting held within a six-month period after the enactment of said Law. At our Extraordinary Shareholders’ Meeting held on April 24, 2001, however, our controlling shareholders decided not to invoke this grace period provided for by Transitory Article No. 10 of Law No. 19.705.

     Despite our shareholders’ decision not to adopt Transitory Article No. 10 of Law 19.705, minority shareholders of our company may nevertheless still have fewer and less well defined rights under Chilean law and our Estatutos, as amended on April 24, 2001, which function as our Articles of Incorporation and our Bylaws, than they might have as minority shareholders of a corporation incorporated in a United States jurisdiction.

     You may not be able to fully exercise your withdrawal rights.

     In accordance with Chilean laws and regulations, any shareholder that votes against certain actions or does not attend the meeting at which such actions are approved may withdraw from our company and receive payment for our shares according to a prescribed formula, provided that such

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shareholder exercises its rights within certain prescribed time periods. Such actions triggering withdrawal rights include the approval of:

	•		the transformation of our company into an entity that is not a corporation (sociedad anónima) governed by the Chilean Companies Law;
	•		our merger with or into another company;
	•		the sale of 50% or more of our assets, whether or not our liabilities are included, or the formulation of a business plan contemplating a sale on those terms;
	•		creation of personal securities or asset-backed securities for the purpose of guaranteeing third-party obligations in excess of 50% of our assets;
	•		the creation of preferential rights for a class of shares or an amendment to those already existing rights, in which case the right to withdraw only accrues to the dissenting shareholders of the class or classes of shares adversely affected;
	•		the remedy of nullification of our documents of incorporation caused by a formality or an amendment to such documents that results in the granting of a right to such remedy; and
	•		such other cases as may be established by the Bylaws (no such additional cases currently are specified in the Bylaws).

     However, because of the absence of legal precedent as to whether a shareholder that has, at the same time, voted both for and against a proposal (such as the Depositary) may exercise withdrawal rights with respect to those shares voted against the proposal, there is doubt as to whether holders of ADSs will be able to exercise withdrawal rights either directly or through the Depositary.

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Item 4. INFORMATION ON THE COMPANY

General

     Distribución y Servicio D&S S.A. is a corporation organized under the laws of Chile. We were incorporated in 1985, and we completed our initial public offering of common shares in Chile in December 1996. We listed our common shares on the New York Stock Exchange under the symbol “DYS” and completed an initial public offering of ADSs in the United States in October 1997. We also listed our common shares on the Madrid Stock Exchange in December 2002. Our principal subsidiaries are Administradora de Concesiones Comerciales de Hipermercados S.A., Administradora de Concesiones Comerciales de Supermercados S.A., Sociedad Anónima Inmobiliaria Terrenos y Establecimientos Comerciales S.A. (SAITEC S.A.), and Maquinsa S.A..

     We are the largest operator of supermarkets in Chile in terms of sales with an estimated market share of 33.13% at December 2002 (30.4% for 2002 as a whole). With over a century of experience in the distribution and retailing of food in the Chilean market, we have developed five complementary store formats operating under five brand names, Almac (launched in the 1950s), Ekono (launched in 1984), Lider (launched in 1995), Lider Vecino (launched in 2000) and Lider Mercado (launched in 2001), each of which enjoys strong name recognition by the Chilean consumer and identification with a specific market position. We increased our total number of stores from 45 to 62 over the last five years, of which 39 are located in the Santiago metropolitan region, which has the highest population density of any region in Chile and in which we have a leading market share estimated at 41.2% at December 2002. Our expansion program currently contemplates the opening of eight new stores (four stores in 2003 and four stores in 2004) and the transformation of all our Ekono and Almac stores into the Lider Vecino format in 2003 to 2004.

     Our multi-format strategy has allowed us to capitalize on the growing Chilean economy, particularly on the rising purchasing power of the middle and lower-middle classes in Chile. Our store formats permit us to segment the Chilean market and appeal to a wide range of customers with various combinations of price, quality, selection and service:

	•		the Almac format emphasizes quality of service and convenience, and currently includes four stores;
	•		our 23 Ekono stores are value-oriented supermarkets, offering a wide assortment of merchandise at low prices, with the current slogan “You are the one that counts”;
	•		our 21 Lider hypermarkets seek to be the low price leader, as evidenced by their slogan “Always the lowest prices” and their offer of “one-stop” shopping for traditional food items and non-food items such as home appliances, electronics, textiles, hardware and toys;
	•		our 13 Lider Vecino stores combine the proximity and friendly atmosphere of neighborhood supermarkets with the advantages of low prices and wide product assortment; and
	•		our single Lider Mercado store emphasizes perishables and provides the broadest assortment of quality products at low prices.

     Our expansion over the last several years has focused on the Lider format.

•

The following table sets forth, at and for the year ended December 31, 2002, certain information regarding our operations in Chile:

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     We believe we have certain distinguishing characteristics and competitive strengths including:

	•		Multiformat Strategy. We have four established store formats with distinct attributes, allowing us to segment the market and target growth areas with the preferred format for the local market conditions. The multiple formats provide the flexibility to match each store site with the format best suited to the surrounding area.
	•		Ownership of Strategic Real Estate. We own 94% of our current Chilean selling space and properties accounting for 95% of the additional selling space to be opened in Chile through the year 2002. This results in greater stability for our current operations and predictability for our expansion program.
	•		Experienced Management. Our management has a demonstrated ability to launch and operate varied formats.
	•		Leading Market Share. We are the market leader in Chile with a market share of 33.13% of Chilean supermarket sales for December 2002 as compared to an estimated 32.9% market share in 2001.
	•		Advanced Distribution and Technology. Our distribution center on the outskirts of Santiago incorporates the most up-to-date technology and distribution logistics. With point of sale, or POS, scanners at every check-out and real time inventory control and sales monitoring systems, we use advanced retail technology comparable to that of leading supermarket companies worldwide.

     In 2002, we had net revenues of Ch$1,048,237 million (US$1,458.7 million), operating income of Ch$42,242 million (US$58.8 million) and net income of Ch$23,777 million (US$33.1 million). Our constant Chilean peso consolidated (or combined) net revenues have increased at a compound annual rate of 7.81% over the five year period from 1998 through 2002, from Ch$719,716 million in 1998 to Ch$1,048,237 million in 2002.

     Our principal executive offices are located at Avenida Presidente Eduardo Frei Montalva 8301, Quilicura, Santiago, Chile, and our telephone number is 011-562-200-5000.

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Strategy

     We seek to further expand our sales and profitability by capitalizing on our core strengths and enhancing our market position in Chile. Key elements of our strategy include:

     •     Expansion and Renovation Program. From 2002 to 2004, we currently anticipate capital expenditures of approximately US$346 million and an increase of approximately 30% of total net selling space. Over the past five years, we spent approximately US$794 million, primarily to develop and expand our store formats. In 2003 and 2004, we expect to open eight new stores in Chile (four in each year) and to transform all our Ekono stores into the Lider format. Expansion will be concentrated in the Lider format in order to take advantage of the increasing purchasing power of the middle and lower middle classes in Chile to which these formats are targeted.

     •     Improvement of Operations-Faro Project. In October 2002, we initiated a comprehensive review of our operations which we refer to as the Faro Project (translated as the Lighthouse Project), with the objective of reducing costs and simplifying our operations by designing and implementing new procedures in two pilot stores. This program consists of four different focus areas. First, we are working on improving our level of productivity by increasing our number of part-time employees. We are also implementing nightly shift-changes in order to bolster productivity and efficiency. Second, we are improving our supply chain by implementing new software and technologies such as planograms, category management and SLIM, an automatic replenishment system. Third, we are working on reducing our operating costs by centralizing all negotiations with service suppliers, including utility, cleaning, raw materials, and maintenance companies. We are also in the process of reducing the number of suppliers we use. Finally, we are implementing a new process designed to reduce shrinkage. In February 2002, we began expanding the Faro project to other stores. We expect the program to be fully implemented in all stores by the end of November 2003.

     •     Expansion in Chile beyond the Santiago Metropolitan Region. As of December 31, 2000, we had 37 of our 52 stores located within the Santiago metropolitan region. In 2001 and 2002 we opened seven stores outside of Santiago and by the end of 2003 we will have opened three more stores outside of Santiago. Those openings include stores in Regions II, VI, VIII and X. As part of our growth strategy, we intend to continue our expansion throughout other regions of Chile, with plans to open four additional regional stores by the end of 2004.

     •     Increasing Sales of Private Label Products. We are targeting our private label products for expansion, which are marketed under the “Ekono”, “Lider” and “Buffet” brand names. Management believes that increasing private label offerings will permit us to provide consumers with lower priced products and bolster our average profit margin due to the fact that our private label products on average afford a profit margin significantly higher than brand name products.

     •     Expansion of Credit Card Operations. To provide an increased source of consumer credit and enhance the purchasing power of our customers, we intend to expand the use of our Presto in-store credit card. By continuing with our account approval responsibilities and increasing the amount of consumer financing we provide, we seek to benefit both in terms of increased sales and finance charges.

     •     Realizing Benefits of Centralized Distribution Center. We have already realized benefits from our distribution center in Santiago and expect to obtain further benefits in the future. Our goal is to centralize distribution of up to 75% of the merchandise required by our supermarkets and hypermarkets in the Santiago metropolitan area, permitting us to reduce in-store inventories, increase personnel efficiencies, reduce storage space. The results of these improvements, we believe will allow us to increase selling space, reduce shrinkage, and lower “stock-outs”. We are considering building additional distribution centers to serve our stores outside of the Santiago metropolitan area as we expand in other

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regions. Moreover, through our Faro project, we continue to work on improving efficiency in our central distribution center in order to achieve a target of 95% shelf service level.

     •     Continued Emphasis on Human Resource Management. We emphasize human resource management as a key area for a successful retail business. Management believes that it has developed a distinctive corporate culture and that its personnel policies for employees at all levels are distinguished by their emphasis on individual responsibility within a context of ongoing training and regular performance reviews.

History

     Our history can be traced back to 1893 with the trading firm of Gratenau y Cía., founded by German immigrants in Valparaíso, a Chilean port city. Mr. Adolfo Ibáñez Boggiano joined Gratenau y Cía. in 1899. In the 1930s, Ibáñez y Cía., the successor firm to Gratenau y Cía., opened Depósitos Tres Montes, small retail warehouses selling coffee, tea and maté. In 1944, Mr. José Manuel Ibáñez Ojeda, in keeping with the evolving retail environment, converted the warehouses into self-service establishments selling an expanded range of products. The firm entered the modern age of food retailing in 1957 with the inauguration in Santiago of the first Supermercado Almac. Thereafter, Almac supermarkets gradually replaced the older self-service establishments.

     During the 1980s, under its current leadership, the firm entered a new period of expansion. In 1984, the firm established its first Ekono supermarket in Santiago. In 1985, our company was incorporated as a distribution and service center for the related Almac and Ekono supermarkets.

     On September 30, 1996, we acquired Ekono-Argentina for an aggregate purchase price equivalent to US$40 million. Ekono-Argentina had been established by the controlling shareholders in 1993 as a joint venture with Casa Tía S.A. (“Casa Tía”), an Argentine retailer, and opened its first two stores in Buenos Aires later that same year. In December of 1999, we entered into a contract to sell 100% of the shares of Ekono-Argentina to Disco S.A. for US$150 million. Of the total purchase price, US$60 million was paid in cash in May 2000 and the balance is payable on a deferred basis over three years. At the time of sale, Ekono-Argentina consisted of ten stores in Argentina which operated in the Ekono format and had net revenues of US$166 million, representing 10.8% of our annual consolidated net revenues in 1999.

     In 1995, we opened our first hypermarket store under the Lider tradename. The following year on October 31, 1996, we acquired, from unrelated third parties, a 100.00% interest in Fullmarket S.A. for $12,541,143, that was paid during 1997. During 1999, we increased the goodwill balance by $1,032,927 paid as the result of the arbitration proceeding that settled a dispute with Fullmarket’s former owners.

     In June of 2000, we launched a new store format with the opening of our first “Lider Vecino” (“Neighborhood Lider”) store in the Nuñoa neighborhood of Santiago. To launch this new format, we transformed certain larger, existing Ekono supermarket facilities into Lider Vecino hypermarkets. This transformation has allowed us to target smaller communities with our hypermarkets by simply converting our larger, existing Ekono supermarket facilities, which range between 2,500 and 5,000 square meters, into Lider Vecino supermarkets. These factors provide us with an advantage over our primary competitors in these communities, which are comprised of traditional supermarkets.

     The objective of the Lider Vecino format is to combine the proximity and friendly atmosphere that characterizes neighborhood supermarkets with the advantages of low prices and the broad product assortment offered by Lider hypermarkets. Lider Vecino hypermarkets enjoy increased efficiency in terms of sales per square meter while serving customers in neighborhoods where Lider stores are not as easily

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accessible due to distance, or are not a first choice as a result of their larger surface area and longer shopping experience.

     Since the launch of the first Lider Vecino hypermarket in June of 2000 (Vespucio Sur in Santiago), two additional Lider Vecino stores were opened that same year: Iquique in Region I and Vicuña Mackenna in the Santiago metropolitan region. Both of these stores were converted into Lider Vecino hypermarkets from the Ekono supermarket format. During 2001 two new Lider Vecino stores were added, Talca and Osorno, both in the Regions.

     Additionally, Lider Temuco was opened in Region VIII (6,650 sq. meters) in April 2001, and Ekono Macul, which had been demolished, was replaced by a new Lider Macul (6,020 sq. meters), which opened in August of the same year.

     During the first half of 2002, six additional Ekono supermarkets were converted into Lider Vecino hypermarkets (San Bernardo, Tomás Moro, Recoleta, Los Morros, Santa Rosa and Independencia) in the Santiago metropolitan region. Additionally, two new Lider Vecino stores were built: one in Region VIII (Los Angeles) and one in the Santiago metropolitan region (Matucana).

     In July 2001, the Lider Mercado format was launched with the opening of the Puente Nuevo hypermarket (11,850 sq. meters of sales area) in the municipality of Lo Barnechea (North East side of Santiago), which has the highest average family income in the country. This new concept places special emphasis on perishable items, including fresh meats and produce. The Lider Mercado format seeks to satisfy customers looking for high quality products at low prices. Unless otherwise distinguished, all references herein to our Lider hypermarket division include our Lider Vecino hypermarkets and our Lider Mercado hypermarket.

Market Overview

     Food Retailing Industry in Chile

     The Chilean food retailing industry is characterized by relatively high fragmentation and strong regional competition between supermarket chains. Supermarkets also compete with smaller grocery stores, convenience stores and open air markets. There are currently no supermarket chains in Chile that operate in every region or have achieved a dominant position in the national market. Accordingly, the level of competition and the identity of competitors varies from region to region. Supermarket chains in Chile, including ourselves, generally compete on the basis of location, price, service, product quality and selection, as well as type and frequency of promotions.

     The Chilean supermarket industry is also characterized by a low level of penetration. Example, according to a study conducted by A.C. Nielsen in 1999, there were 8,677 people for every supermarket in the United States as compared to 24,300 people for every supermarket in Chile. A.C. Nielsen figures for Chile in 2002 show 23,900 inhabitants per supermarket based on population estimates from the National Bureau of Statistics (INE). According to Deutsche Bank estimates for 2002, there are 19,600 people in Chile for every supermarket as compared to 11,600 in the United States, and 56 square meters of selling space for every 1000 inhabitants in Chile, as compared to 380 square meters in the United States. We estimate that in 2002 the seven largest supermarket chains in Chile accounted for approximately 60.3% of total supermarket net sales. In 2002, we accounted for approximately 30.5% of total net sales of the supermarket industry in Chile which represents the highest total market share in Chile (this percentage is calculated including sales of non-food items). In the Santiago metropolitan region, which has the highest population density (with 40% of Chile’s population), the highest levels of per capita disposable income and highest level of supermarket penetration in Chile, we have the largest

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market share in terms of sales (including both food and non-food items), with approximately 41.2% of the total market of which Lider has 7.7% and Ekono and Almac have 33.5% for the year 2002.

     To the extent estimates are contained in the discussion below and attributed to our company, management believes them to be reliable, but these estimates have not been confirmed by independent sources. Most market information is derived from information compiled by A.C. Nielsen or INE. Although supermarkets are the primary retail distribution outlet of foodstuffs and other household items in the Santiago metropolitan region with an estimated 47% of net sales in the region, we estimate that, in the rest of Chile, supermarkets account for 53% of such net sales. We believe that total net sales by supermarkets in Chile grew at an average annual rate of 9.9% during the last ten years, exceeding the 7.6% average annual growth rate of GDP in Chile. The following table sets forth our estimates of certain information regarding population of Chile and its supermarket industry, at and for 2002: