As filed with the Securities and Exchange Commission on July
  1, 2002 SECURITIES AND EXCHANGE COMMISSION 
  WASHINGTON, D.C. 20549 FORM 20-F 
  ( ) REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES
  EXCHANGE ACT OF 1934 
  OR
  (*) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
  ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001 
  OR
  ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
  ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO 
  COMMISSION FILE NUMBER 33-44756

Controladora Comercial Mexicana, S.A. de C.V.
  (Exact name of Registrant as specified in its charter)
  N/A 
  (Translation of Registrant's name into English)

United Mexican States 
  (Jurisdiction of incorporation or organization)

Av. Revolucion No. 780 Modulo 2 
  Colonia San Juan 
  03730 Mexico, D.F. 
  Mexico
  (Address of principal executive offices)

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

|Title of each class | Name of each exchange on which registered
|------------------- | -----------------------------------------

|Title of each class                                               | Name of each exchange on which registered          
|----------------------------------------------------------------- | ---------------------------------------------------
|Series B Shares without par value ("B Shares")                    | New York Stock Exchange (for listing purposes only)
|Series C Shares without par value ("C Shares")                    | New York Stock Exchange (for listing purposes only)
|Units, each representing three B shares and one C share ("Units") | New York Stock Exchange (for listing purposes only)
|Global Depositary Shares ("GDSs"),each representing 20 Units      | New York Stock Exchange                            

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

Securities for which there is a reporting obligation pursuant
  to Section 15(d) of the Act:
  9.375% Senior Notes due 2005

The number of outstanding shares of each of the issuer's classes
  of capital or common stock as of December 31, 2001 was: 
  4,005,711,639 B Shares 
  338,288,361 C Shares

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. 
  Yes (*) No ( )

Indicate by check which financial statement item the registrant
  has elected to follow. Item 17 (*) Item 18 ( )

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TABLE OF CONTENTSPART I Item 1. Identity of Directors, Senior Management and Advisers Item 2. Offer Statistics and Expected Timetable Item 3. Key Information 
  Selected Financial Data 1 
  Dividends
  Exchange Rate Information 5 
  Risk Factors 7 
  Forward-Looking Statements 10 Item 4. Information on the Company 11 
  History and Development of the Company
  Capital Expenditures
  Business Overview 
  Organizational Structure 
  Property, Plant and Equipment Item 5. Operating and Financial Review and Prospects Item 6. Directors, Senior Management and Employees 
  Board Practices Item 7. Major Shareholders and Related Party Transactions 
  Major Shareholders 
  Related Party TransactionsItem 8. Financial Information Item 9. Offer and Listing Details Item 10. Other Information 
  Bylaws 
  Material Contracts 
  Legal Proceedings 
  Exchange Controls and Restrictions on Foreign Investment 
  Taxation 
  Documents on Display Item 11. Quantitative and Qualitative Disclosures About Market Risk 
  Interest Rate Risk 
  Foreign Exchange Rate RiskItem 12. Description of Securities Other than Equity Securities PART II Item 13. Defaults, Dividend Arrearages and Delinquencies Item 14. Material Modifications to the Rights of Security Holders and
  Use of Proceeds PART III Item 15. [Reserved] Item 16. [Reserved] PART IV Item 17. Financial Statements Item 18. Financial Statements Item 19. Exhibits

---

We publish our Financial Statements in accordance with generally accepted
  accounting principles in Mexico, or Mexican GAAP, which differ in significant
  respects from generally accepted accounting principles in the United States
  Of America ("United States"), or U.S. GAAP, and accounting procedures adopted
  in other countries. The exchange rates used in preparing our Financial Statements
  are determined by reference as of the specified date to the interbank free market
  exchange rate, or the Interbank Rate, as reported by Banco Nacional de Mexico,
  S.A. As of December 31, 2001, the Interbank Rate was Ps. 9.16 to U.S.$1.00.
  See "Item 3. Key Information-Exchange Rate Information." The exchange rates
  used in translating Pesos into U.S. Dollars elsewhere in this annual report
  are determined by reference to the Interbank Rate as of December 31, 2001, unless
  otherwise indicated.

Unless otherwise indicated, (i) information included in this annual report
  is as of December 31, 2001 and (ii) references to "Ps." or "Pesos" in this annual
  report are to Mexican Pesos and references to "Dollars," "U.S. Dollars," "U.S.
  dollars," "$," or "U.S.$" are to United States dollars.

Unless otherwise indicated, (i) operating information contained in this Annual
  Report regarding our stores relates to all of our stores, which are the Comercial
  Mexicana, Mega, Bodega, Sumesa, and the Costco membership warehouses (through
  a joint venture, the Costco Mexico joint venture, or Costco Mexico, with Costco
  Company, Inc. (formerly Price/Costco, Inc.), or Costco, of the United States),
  but not our restaurants, and (ii) information herein regarding same store sales,
  sales per operating employee and sales per retail square foot is calculated
  on the basis of 100% of the sales from all of our stores, including those operated
  through the Costco Mexico joint venture.

As used herein, the term "billion" means one thousand million.

---

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

Selected Financial Data

The following tables present our selected financial data and that of our consolidated
  subsidiaries. We consolidate our proportionate interest in the results and assets
  and liabilities of the Costco Mexico joint venture. This data is qualified in
  its entirety by reference to, and should be read together with, our audited
  year-end financial statements, or Financial Statements. Our Financial Statements
  have been prepared in accordance with Mexican GAAP, which differs in significant
  respects from U.S. GAAP and accounting procedures adopted in other countries.
  Note 19 to the Financial Statements provides a description of the principal
  differences between Mexican GAAP and U.S. GAAP as they relate to us and provides
  a reconciliation to U.S. GAAP of net income for the fiscal years ended December
  31, 1999, 2000 and 2001 and total stockholder's equity as of December 31, 2000
  and 2001.

In calculating the convenience translations included herein, Pesos are translated
  into U.S. dollars at an exchange rate of Ps. 9.16 per U.S. dollar, the Representative
  Rate as of December 31, 2001. These translations should not be construed as
  a representation that such Peso amounts actually represent U.S. dollar amounts
  or could be converted into U.S. dollar amounts at the rates indicated.

|Year Ended December 31,                                                                                
|-------------------------------------------------------------------------------------------------------
|                                                                                                       
|(Millions of constant Pesos as of December
      31, 2001 and millions of U.S. Dollars) (1)            
|Income Statement Data                                                                                  
|Mexican GAAP:                                                                                          
|Net sales                                                                                              
|Gross profit                                                                                           
|Selling and administrative                                                                             
|Operating income                                                                                       
|Integral results of financing (2):                                                                     
|Interest expense                                                                                       
|Interest income (3)                                                                                    
|Foreign-exchange gain (loss), net                                                                      
|Loss in Forward agreement                                                                              
|Gain from monetary position                                                                            
|Other income (expense), net (4)                                                                        
|Provisions for:                                                                                        
|Income and asset taxes                                                                                 
|Employees profit sharing                                                                               
|Deferred income tax and gain on monetary position through the
      initial deferred income tax effect.
|Interest of minority stockholders in results of subsidiaries                                           
|Net income                                                                                             
|Net income per Unit and B Unit (5)                                                                     
|Net income per GDS (7)                                                                                 
|Dividends per Unit and B Unit (5)                                                                      
|Dividends per GDS (6)                                                                                  
|Weighted average Units and B Units outstanding (millions)(5)                                           
|U.S. GAAP (7):                                                                                         
|Net sales                                                                                              
|Basic income                                                                                           
|Basic income per Unit and B Unit (5)                                                                   
|Basic income per GDS (6)                                                                               
|Balance Sheet Data                                                                                     
|Mexican GAAP:                                                                                          
|Cash and temporary investments                                                                         
|Current assets                                                                                         
|Property, plant and equipment, net                                                                     
|Total assets                                                                                           
|Short-term debt (8)                                                                                    
|Long-term debt (8)                                                                                     
|Total liabilities                                                                                      
|Minority interest                                                                                      
|Majority stockholders' equity                                                                          
|U.S. GAAP: (7)                                                                                         
|Total assets                                                                                           
|Total liabilities                                                                                      
|Stockholders' equity                                                                                   
|Other Data                                                                                             
|Mexican GAAP:                                                                                          
|EBITDA (9)                                                                                             
|Depreciation and amortization                                                                          
|Capital expenditures (10)                                                                              
|Interest expense                                                                                       
|EBITDA/Interest expense                                                                                
|Total debt/EBITDA                                                                                      
|Net debt/EBITDA (11)                                                                                   
|Total debt/capitalization                                                                              
|Working capital (12)                                                                                   
|Year Ended December 31,                                                                                
|                                                                                                       
|(Millions of constant Pesos as of December 31, 2001
        and millions of U.S.Dollars) (1)           
|Operating Information                                                                                  
|Store Information (13):                                                                                
|Food sales (14)                                                                                        
|Non-food sales (14)                                                                                    
|Average annual sales per store (millions)(15)                                                          
|Sales per retail square foot (thousands)(15)                                                           
|Sales per operating employee (thousands)(15)(16)                                                       
|Same store sales growth (18)                                                                           
|                                                                                                       
|Stores:                                                                                                
|Operating at end of period                                                                             
|Opened                                                                                                 
|Closed                                                                                                 
|Remodeled (18)                                                                                         
|Total retail square feet at end of period (thousands)(19)                                              
|Number of employees (at end of period)                                                                 
|Number of operating employees                                                                          
|                                                                                                       
|Restaurant Information:                                                                                
|Restaurants operating at end of period                                                                 
|Total restaurant seats at end of period                                                                

Notes to Selected Consolidated Financial and Operating Information 
  (1) Except Unit and B Unit data and operating information, percentages and ratios.
  
  (2) Integral results of financing include interest expense, interest income,
  foreign-exchange loss, net, and gain from monetary position. 
  (3) Interest income includes our income from interest-bearing temporary investments
  and our net gain or loss on the market value of our temporary investments. In
  1998, 1999 and 2000 interest income additionally includes gains of Ps.71.2 million,
  Ps.1.0 million and Ps.0.3 million respectively (for 2001 there is none) from
  the repurchase and cancellation of Senior Notes at a discount price. See Note
  8 to the Financial Statements. 
  (4) Includes miscellaneous income, net, revenues received from maintenance income,
  and negative goodwill from the acquisition of companies under common control,
  as well as a special item from change in amortization of preopening costs in
  1997 and 1998; and in 1998, 1999, 2000 and 2001, write-offs of fixed assets
  not compliant with the Y2K issue. For the year ended December 31, 2001, also
  includes gain in permanent investment sales. See Note 2 to the Financial Statements.
  
  (5) After giving effect to the Restructuring, including the split of each B
  Share into three B Shares and the subsequent distribution of one C Share or
  one B Share in respect of every three B Shares, as a result of which shareholders
  now hold Units and B Units. Amounts do not include shares held in treasury.
  
  (6) Each GDS represents 20 Units. 
  (7) See Note 19 to the Financial Statements. 
  (8) See Note 8 to the Financial Statements. 
  (9) EBITDA represents operating income plus depreciation and amortization. We
  have included EBITDA data as a convenience because such data is used by certain
  investors to measure a company's ability to service debt. EBITDA is not a measure
  of financial performance under either Mexican GAAP or U.S. GAAP and should not
  be considered an alternative to net income as a measure of operating performance
  or to cash flows from operating activities as a measure of liquidity. 
  (10) Capital expenditures for all periods exclude amounts contributed by Costco
  to the Costco Mexico joint. See "Item 4. Information on the Company." 
  (11) Net debt is total debt less cash and temporary investments. 
  (12) Working capital is current assets minus current liabilities. 
  (13) Store information relates to all of our stores, including those operated
  through joint ventures (calculated on the basis of 100% of the sales from the
  Costco Mexico stores). The information does not include our restaurants. 
  (14) Food sales include sales of basic groceries and perishables. Non-food sales
  include sales of general merchandise and clothing. 
  (15) In computing sales per retail square foot for a period, we divide total
  store sales for the full period by the aggregate retail square footage at the
  end of such period. Accordingly, stores that are opened for less than the full
  period have the effect of decreasing store sales per retail square foot, and
  stores that are closed prior to the end of the full period have the opposite
  effect. Similarly, in computing average annual sales per store, we divide total
  store sales for the full period by the number of stores at the end of the period,
  and in computing sales per operating employee, we divide total store sales for
  the full period by the number of operating employees at the end of the period
  . 
  (16) Includes all employees at our stores other than administrative employees
  and employees of our restaurants. 
  (17) Calculated by comparing sales at stores during a period against sales at
  the same stores during the prior period, using only those same months in each
  period during which the same stores were open and using constant Pesos. 
  (18) Includes conversions of stores from one format to another format. 
  (19) Retail square feet includes areas for cashiers, which constituted approximately
  8.3% of the total selling area of our stores at December 31, 2001.

Dividends

The table below sets forth the nominal amount of preferential dividends per
  Unit paid on April 14, 2000 in respect of the fiscal year ended December 31,
  1999; paid in April 5, 2001 in respect of the fiscal year ended December 31,
  2000; and paid on April 11, 2002 in respect of the fiscal year ended December
  31, 2001. Peso amounts have been translated into U.S. dollars at the exchange
  rate on each of the respective payment dates.

During our last general stockholders meeting on April 11, 2002 our stockholders
  approved a dividend of Ps.0.107 for each Unit, in a single payment which was
  made to holders of record on April 18, 2002

|In respect of | Dividend In nominal pesos per Unit
|------------- | ----------------------------------
|1999          | Ps.092                            
|2000          | Ps.107                            
|2001          | Ps.107                            

Exchange Rate Information

Exchange Rates 
  Mexico abolished its exchange control system on November 11, 1991. Prior to
  December 1994, the Mexican central bank, or Banco de Mexico, kept the Peso-U.S.
  dollar exchange rate within a range prescribed by the government through intervention
  in the foreign exchange market. On December 21, 1994, the Mexican Government
  announced its decision to suspend its policy of intervention by Banco de Mexico
  and to allow the Peso to float freely against the U.S. Dollar. Factors contributing
  to the decision included the growing size of Mexico's current account deficit,
  the declining level of Banco de Mexico's foreign exchange reserves, rising interest
  rates for other currencies, especially the U.S. dollar, and reduced confidence
  in the Mexican economy on the part of international investors due to political
  uncertainty. See "Item 3. Key Information-Risk Factors-Risk Factors Relating
  to Mexico" and "Item 5. Operating and Financial Review and Prospects." The peso
  declined sharply in December 1994 and continued to fall under conditions of
  high volatility in 1995. In 1996 the peso fell more slowly and was less volatile.
  Relative stability characterized the foreign exchange markets during the first
  three quarters of 1997. The fall of the Hang Seng Index of the Hong Kong Stock
  Exchange on October 24, 1997, marked the beginning of a period of increased
  volatility in the foreign exchange markets with the peso falling over 10% in
  just a few days. During 1998, the foreign exchange markets experienced volatility
  as a result of financial crises in Asia and Russia and financial turmoil in
  countries such as Brazil and Venezuela. The peso declined during this period,
  but has been relative stable in 2000, 2001 and 2002 to date. There can be no
  assurance that the Mexican Government will maintain its current policies with
  regard to the Peso or that the Peso will not further depreciate or appreciate
  in the future.

The following table sets forth, for the periods indicated, the period-end,
  average high and low noon buying rate as published by the Federal Reserve Bank
  of New York, or the Noon Buying Rate, expressed in nominal Pesos per U.S. Dollar.

|Noon Buying Rate (1)        
|----------------------------
|Year Ended December 31,     
|1996                        
|1997                        
|1998                        
|1999                        
|2000                        
|2001                        
|Month Ended: December, 2001 
|2002: January               
|February                    
|March                       
|April                       
|May                         
|June (through June 14, 2002)

(1) As published by the Federal Reserve Bank of New York, since November 8,
  1993. 
  (2) Average of end-month rates. Monthly average rates reflect the average of
  daily rates.

Any significant future devaluation of the Peso could have a material adverse
  effect on our liquidity and results of operations. See "Item 3. Key Information-Risk
  Factors".

Risk Factors

Risk Factors Relating to Developments in Mexico Economic and Political Developments in Mexico and Elsewhere May Adversely
  Affect Our Business. Most of our operations and assets are located in
  Mexico. As a result, our business may be affected by the general condition of
  the Mexican economy, the devaluation of the Peso as compared to the U.S. Dollar,
  Mexican inflation, interest rates and political developments in Mexico and elsewhere.

Mexico Has Experienced Adverse Economic Conditions. In the past,
  economic crises in Asia, Russia, Brazil and other emerging markets adversely
  affected the Mexican economy and thus, future economic developments in Mexico
  and other emerging markets, such as Argentina, as well as the recession in the
  United States, could adversely affect the Mexican economy in future periods.
  In 1999, Mexico's gross domestic product, or GDP, increased 3.7%, and in 2000,
  GDP increased 6.6%. According to Mexican government estimates, GDP decreased
  0.3% and 2.0% in 2001 and the three month period ended March 31, 2002, respectively.
  Inflation in 1999, 2000, 2001 and the three month period ended March 31, 2002
  was 12.3%, 9.0%, 4.4% and 1.4%, respectively. GDP growth fell short of Mexican
  government estimates in 2001 due primarily to the slowdown in the growth of
  the U.S. economy and a decrease in exports as a result of the 5.7% appreciation
  of the Peso as compared to the U.S. Dollar.

Developments in Other Emerging Market Countries or the United States
  May Affect Us and the Prices for Our Securities. The market value of
  securities of Mexican companies, the economic and political situation in Mexico
  and our financial condition and results of operations are, to varying degrees,
  affected by economic and market conditions in other emerging market countries
  and in the U.S. Although economic conditions in other emerging market countries
  and the U.S. may differ significantly from economic conditions in Mexico, investors'
  reactions to developments in any of these other countries may have an adverse
  effect on Mexico, the market value or trading price of securities of Mexican
  issuers, including ours, or our business.

In particular, 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 Mexico, the market value of our securities or
  our business. The current Argentine President, Eduardo Duhalde, took office
  on January 6, 2002 in the midst of significant political unrest after a series
  of interim presidents and administrations took office following the resignation
  of President Fernando de la Rua in December 2001. The recent devaluation of
  the Argentine peso will 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 has recently prohibited Argentine
  debtors from servicing their external debt without Argentine Central Bank approval.
  To the extent that the new Argentine government is unsuccessful in preventing
  further economic decline via this and other measures, this crisis may adversely
  affect Mexico, the price of our securities or our business.

In addition, on April 12, 2002, following a week of strikes, demonstrations
  and riots, Venezuelan President Hugo Chavez was forced to resign from office
  by Venezuela's military commanders in an attempted coup d'etat. Although Mr.
  Chavez was restored to power on April 14, 2002, the political and economic future
  of Venezuela remains uncertain. We cannot predict what effect, if any, these
  events will have on the economies of other emerging market countries, Mexico,
  the price of our securities or our business.

In late October 1997, prices of both Mexican debt securities and Mexican equity
  securities dropped substantially, precipitated by a sharp drop in Asian securities
  markets. Similarly, in the second half of 1998 and in early 1999, prices of
  Mexican securities were adversely affected by the economic crises in Russia
  and Brazil. The price of our securities has also historically been adversely
  affected by increases in interest rates in the United States and elsewhere.

The September 11, 2001 Terrorist Attacks on the United States Have and
  are Likely to Continue to Negatively Affect Industry and Economic Conditions
  Globally, Which May Have a Negative Effect on Our Business. Our profitability
  is affected by numerous factors, including changes in consumer confidence and
  spending, which may decline as a result of numerous factors outside of our control,
  such as terrorist attacks and acts of war. The terrorist attacks on September
  11, 2001 depressed economic activity in the U.S. and globally, including the
  Mexican economy. It is not certain how long these economic conditions will continue.
  If terrorist attacks continue or worsen, if the weak economic conditions in
  the U.S. continue or worsen, or if a global recession materializes, our business,
  financial condition and results of operations may be materially and adversely
  affected.

Currency Fluctuations or the Devaluation and Depreciation of the Peso
  Could Limit the Ability of Us and Others to Convert Pesos into U.S. Dollars
  or Other Currencies and/or Adversely Affect Our Financial Condition.
  Less than half of our indebtedness and some of our costs are U.S. Dollar-denominated,
  while our revenues are primarily Peso-denominated. As a result, decreases in
  the value of the Peso against the U.S. Dollar could cause us to incur foreign
  exchange losses, which would reduce our net income.

Severe devaluation or depreciation of the Peso may also result in governmental
  intervention, as has resulted in Argentina, or disruption of international foreign
  exchange markets. This may limit our ability to transfer or convert Pesos into
  U.S. Dollars and other currencies for the purpose of making timely payments
  of interest and principal on our indebtedness and adversely affect our ability
  to obtain imported goods. While the Mexican government does not currently restrict,
  and for many years has not restricted, the right or ability of Mexican or foreign
  persons or entities to convert Pesos into U.S. Dollars or to transfer other
  currencies outside of Mexico, the Mexican government could institute restrictive
  exchange control policies in the future. Devaluation or depreciation of the
  Peso against the U.S. Dollar may also adversely affect U.S. Dollar prices for
  our securities. Such fluctuations also would affect the conversion by the Depositary
  into U.S. dollars of any cash dividends paid in Pesos on the B Shares and the
  C Shares comprising the Units.

High Inflation Rates in Mexico May Decrease Consumer Demand for Our Goods
  While Increasing Our Costs. In recent years, Mexico has experienced
  high levels of inflation. The annual rate of inflation, as measured by changes
  in the Mexican National Consumer Price Index, or the NCPI, was 12.3% for 1999,
  9.0% for 2000, 4.4% for 2001 and 1.4% for the three month period ended March
  31, 2002. High inflation rates can adversely affect our business and results
  of operations in the following ways:

--> inflation can adversely affect consumer purchasing power, thereby adversely
  affecting consumer demand for our products;

--> to the extent inflation exceeds our price increases, our prices and
  revenues will be adversely affected in "real" terms; and

--> if the rate of Mexican inflation exceeds the rate of devaluation of
  the Peso against the U.S. Dollar, our U.S. Dollar-denominated sales will decrease
  in relative terms when stated in constant Pesos.

High Interest Rates in Mexico Could Increase Our Financing Costs.
  Mexico has, and is expected to continue to have, high real and nominal interest
  rates. The interest rates on 28-day Mexican government treasury securities averaged
  21.4%, 15.2%, 11.3% and 7.4% for 1999, 2000, 2001 and the three month period
  ended March 31, 2002. Accordingly, if we need to incur Peso-denominated debt
  in the future, it will likely be at high interest rates.

The Loss of the Presidency in 2000 by the Former Ruling Party Could Affect
  Mexican Economic Policy, which in Turn Could Adversely Affect the Mexican Economy.
  In the Mexican national elections held on July 2, 2000, Vicente Fox of the opposition
  party, the Partido Accion Nacional, or the National Action Party, won the presidency.
  His victory ended more than 70 years of presidential rule by the Partido Revolucionario
  Institucional, or the Institutional Revolutionary Party. Neither the Institutional
  Revolutionary Party nor the National Action Party succeeded in securing a majority
  in the Chamber of Deputies or the Senate, the two houses of the Mexican Congress.
  Although members of the National Action Party have governed several states and
  municipalities, the National Action Party has not previously governed on a national
  level. A change in economic policy, as well as currency instability in Mexico,
  could adversely affect the Mexican economy, which in turn could have a material
  adverse effect on our business, financial condition and results of operations,
  as well as market conditions and prices for our securities.

Mexican Antitrust Laws May Limit Our Ability to Expand Through Acquisitions
  or Joint Ventures. Mexico's federal antitrust laws and regulations may
  affect some of our activities, including our ability to introduce new products
  and services, enter into new or complementary businesses or joint ventures and
  complete acquisitions. In addition, the federal antitrust laws and regulations
  may adversely affect our ability to determine the rates we charge for our products.
  Approval of the Mexican Antitrust Commission is required for us to acquire and
  sell significant businesses or enter into significant joint ventures. The Mexican
  Antitrust Commission may not approve any proposed future acquisition or joint
  venture that we may pursue. See "Information on the Company - Business Overview."

The Protections Afforded To Minority Shareholders In Mexico Are Different
  From Those In The United States. In accordance with the Ley del Mercado
  de Valores, or the Mexican Securities Market Law, as amended, we recently amended
  our bylaws to increase the protections afforded to our minority shareholders
  in an effort to try to insure that our corporate governance procedures are substantially
  similar to international standards. See "Other Information - Mexican Securities
  Market Law" and "- Bylaws - Other Provisions." Notwithstanding these amendments,
  under Mexican law, the protections afforded to minority shareholders are different
  from those in the United States. In particular, the law concerning fiduciary
  duties of directors is not well developed, there is no procedure for class actions
  or shareholder derivative actions and there are different procedural requirements
  for bringing shareholder lawsuits. As a result, in practice, it may be more
  difficult for our minority shareholders to enforce their rights against us or
  our directors or principal shareholders than it would be for shareholders of
  a U.S. company.

Risk Factors Relating to the Company

We participate in a very competitive market and increased competition
  may adversely affect our business. The retail industry in Mexico is
  highly competitive. We face strong competition from other national and international
  operators of supermarket and retail stores, including Walmex (formerly Cifra),
  Carrefour and Gigante. All of the foregoing stores owned by third parties compete
  with our stores. The Costco membership warehouses face competition from Sam's
  Club, a self-service warehouse club owned by Walmex. We expect that other United
  States and international retailers may enter the market in Mexico in the future
  either through joint ventures or directly. We also compete with numerous local
  and regional supermarket and self-service store chains, as well as small, family-owned
  neighborhood stores and street markets, in each region in which we do business.
  In addition, certain of our stores which are located in the same shopping areas
  compete with each other. The restaurant business in Mexico is also highly competitive,
  and Restaurantes California compete with numerous regional and national fast-food
  restaurant chains, local restaurants and street merchants. There can be no assurance
  that our performance will not be adversely affected by increased competition,
  whether resulting from these or other sources. See "Item 4. Information on the
  Company-Business Overview-Competition."

Our Growth Strategy is Dependent Upon the Continued Improvement of the
  Mexican Economy. A major component of our future growth is expected
  to come from adding new stores (including Costco membership warehouses) and
  restaurants and remodeling existing stores. Our ability to resume our expansion
  and remodeling plans as provided in our current business plan and our returns
  on our investment in expansion and remodeling are dependent to a significant
  extent on the continued improvement of Mexico's economic performance. Even following
  the continued recovery of the Mexican economy, there can be no assurance that
  we will be able to open or remodel the number of stores (including Costco membership
  warehouses) and restaurants currently intended, whether because of economic
  conditions, availability of financing, availability of suitable and affordable
  sites, the ability to attract and retain certain qualified employees or otherwise.
  See "Item 5. Operating and Financial Review and Prospects" and "Item 4. Information
  on the Company."

Our Joint Venture With Costco Mexico is Jointly Controlled and is Subject
  to Termination in Certain Circumstances. The Costco Mexico joint venture
  is managed, on a day-to-day basis, by officers appointed by Costco and approved
  by us pursuant to certain management agreements between Costco and the Costco
  Mexico joint venture. In addition, the affirmative vote of at least two of the
  three directors appointed by each of Costco and us to the Costco Mexico joint
  venture board of directors is required to approve significant decisions regarding
  the joint venture, including among other things, certain revisions to the joint
  venture business plan, obligations or acquisitions of the estate or certain
  other assets not otherwise provided for in the business plan or the removal
  of the management personnel appointed by Costco. Furthermore, certain significant
  decisions also require the approval of both members of an executive committee
  which consists of our chief executive officer and that of Costco. Accordingly,
  although we expect Costco membership warehouses to be an important part of our
  future growth, we do not have sole control over the growth and operation of
  the Costco membership warehouse format. In addition, the Costco Mexico joint
  venture is subject to termination in certain circumstances. See "Item 4. Business
  Overview-Retail Store Formats."

There Are Differences in Corporate Disclosure and Accounting Standards
  for Mexican Companies and this May Cause our Financial Statements to Differ
  in Certain Respects from U.S Issuers. A principal objective of the securities
  laws of the United States, Mexico and other countries is to promote full and
  fair disclosure of all material corporate information. However, there may be
  less publicly available information about foreign issuers of securities listed
  in the United States than is regularly published by or about domestic issuers
  of listed securities. In addition, we prepare our Financial Statements in accordance
  with Mexican GAAP, which differ from U.S. GAAP and accounting procedures adopted
  in other countries in a number of respects. For example, most Mexican companies,
  including us, must incorporate the effects of inflation directly in accounting
  records and in their published Financial Statements. Thus, Mexican financial
  statements and reported earnings may differ from those of companies in other
  countries in this and other respects. Note 18 to our Annual Financial Statements
  describes the principal differences between Mexican GAAP and U.S. GAAP as they
  relate to us and provides a reconciliation to U.S. GAAP of net income and total
  stockholders' equity.

Our Ability to Make Timely SEC Filings Could Be Impaired if the SEC Ceases
  Accepting Financial Statements Audited by Arthur Andersen, LLP and its Non-U.S.
  Affiliates. Costco Mexico's independent certified public accountant,
  Arthur Andersen & Co. has informed us that on March 14, 2002, an indictment
  by the U.S. Department of Justice was unsealed charging Arthur Andersen LLP,
  its U.S. affiliated firm, with federal obstruction of justice arising from U.S.
  government's investigation of Enron Corp. Notwithstanding the recent finding
  of guilt against Arthur Andersen in this case, the SEC has said that, for the
  time being, it will continue accepting financial statements audited by Arthur
  Andersen LLP and its non-U.S. affiliates so long as they are able to make certain
  representations to their auditing clients. We have received the required representations
  from Arthur Andersen & Co. and are filing Costco Mexico's financial statements
  as part of this annual report on Form 20-F.

We are Controlled by Principal Shareholders. Members of the González
  family, including are our Principal Shareholders and own a majority of the outstanding
  B Shares through B Units and Units. As a result of this majority ownership,
  the Principal Shareholders are able to elect a majority of the members of the
  Board and to determine the outcome of the voting on substantially all actions
  that require shareholder approval. See "Item 7. Major Shareholders and Related
  Party Transactions."

The Principal Shareholders have advised us that, in connection with any primary
  sale of equity by us in the future, they may purchase additional B Shares through
  B Units or Units (through the exercise of pre-emptive rights, if any, or otherwise)
  so that they will continue to own B Shares representing a majority of the total
  outstanding B Shares of CCM. The Principal Shareholders have also advised us
  that they may raise funds for such purchase by selling, borrowing or engaging
  in other types of financing transactions secured by B Units or Units which they
  own.

Our Principal Shareholders Have Substantial Influence Over Our Management
  and the Interests of Our Principal Shareholders May Differ from Those of Other
  Shareholders. Approximately 68.82% of our outstanding B Units, the class
  of capital stock that is entitled to elect a majority of our Board of Directors
  and the only class of capital stock entitled to vote on other general corporate
  matters, is beneficially owned, directly or indirectly by a trust the beneficiaries
  of whom are members of the González Family. As our controlling shareholder,
  this trust controls our business through its power to elect a majority of our
  Board of Directors and to determine the outcome of almost all actions that require
  shareholder approval. For example, the trust has the ability to cause us to
  declare dividends. The principal grantor and beneficiary of this trust is a
  corporation owned by the González family. For a description of this trust see
  the section entitled The Scotiabank Trust. In addition to their indirect ownership
  interest in our company, Mr. Carlos González Nova, Mr. Guillermo González Nova,
  Mr. Jaime González Nova, Mr. Carlos González Zabalegui, Ms. Elena González Guerra,
  and Mr. Pablo González Guerra serve as our directors. Mr. Guillermo González
  Nova also serves as our Chairman of the Board, and Mr. Carlos González Zabalegui
  serves as our Chief Executive Officer. See "Major Shareholders and Related Party
  Transactions -Principal Shareholders" and "Directors, Senior Management and
  Employees."

Forward-Looking Statements

Some written information and oral statements made or incorporated by reference
  from time to time by CCM, or its representatives in this annual report, other
  reports, filings with the Securities and Exchange Commission, press releases,
  conferences, or otherwise, are "forward-looking statements" within the meaning
  of the Private Securities Litigation Reform Act of 1995. Forward-looking statements,
  which are subject to various risks and uncertainties, include, without limitation,
  any statement that may predict, forecast, indicate, or imply future results,
  performance, or achievement, and may contain forward-looking terminology such
  as "anticipate," "believe," "continue," "expect," "estimate," "project," "will,"
  "will be," "will continue," "will likely result," "may," "plan," or words or
  phrases of similar meaning. Forward-looking statements involve risks and uncertainties
  that may cause actual results to differ materially from the forward-looking
  statements. The risks and uncertainties are detailed from time to time in reports
  filed by CCM with the SEC and include, among others, the following: 
  * international, national and local general economic and market conditions 
  * the size and growth overall of the retail and restaurant markets; 
  * intense competition among distribution and sellers of retail items and within
  the restaurant business; 
  * fluctuations and difficulty in forecasting operating results; 
  * dependence on suppliers; 
  * general risks associated with doing business in Mexico, including political
  and economic instability; and changes in government regulations; and 
  * other risk factors referenced in this annual report.

The risks summarized above are not exhaustive. Other sections of this annual
  report may include additional factors that could adversely impact our business
  and financial performance. Moreover, we operate in a very competitive and rapidly
  changing environment. New risk factors emerge from time to time and it is not
  possible for management to predict all of these risk factors, nor can it assess
  the impact of all of these risk factors on our business or the extent to which
  any factor, or combination of factors, may cause actual results to differ materially
  from those contained in any forward-looking statements. Given these risks and
  uncertainties, investors and analysts should not place undue reliance on forward-looking
  statements as a prediction of actual results. Accordingly, when considering
  forward-looking statements, you should keep in mind the factors described in
  "Item 3. Key Information-Risk Factors" and other cautionary statements appearing
  in "Item 5. Operating and Financial Review and Prospects" and elsewhere in this
  annual report.

The predictive and forward-looking statements in this annual report may not
  come true and are made under the SEC's disclosure safe harbor. Forward-looking
  statements speak only as of the date they are made, and we do not undertake
  any obligation to update them in light of new information or future developments.

Item 4. Information on the Company

History and Development of the Company

Controladora Comercial Mexicana, S.A. de C.V., or CCM or the Company, is a
  limited liability stock company with variable capital (sociedad anonima de capital
  variable) organized under the laws of Mexico. Our principal offices are located
  at Av. Revolucion No. 780, Modulo 2 Colonia San Juan, C.P. 03730 Mexico, D.F.
  and our telephone number is (52) 55 5270 9312.

We trace our history to 1930 when Antonino González Abascal and his sons founded
  their first store in Mexico City, which sold primarily textiles. The first combination
  supermarket/general merchandise store under the name Comercial Mexicana was
  opened in Mexico City in 1962, and 20 additional stores were established during
  the 1970's. During the 1980's we continued to expand through the acquisition
  of the Sumesa chain in 1981 and with 51 Comercial Mexicana store openings. The
  first Restaurante California commenced operations in 1982, and the first Bodega
  opened in 1989. We entered into the Costco Mexico joint venture in June 1991,
  and the initial Costco Mexico opened in February 1992. In 1993, we introduced
  the Mega format to take advantage of the perceived potential of the supercenter
  and hypermarket formats. CCM was fully owned by the González family until April
  1991, when shares of capital stock of CCM were listed in the Mexican Stock Exchange
  and offered publicly in Mexico. In 1996, GDSs representing shares of capital
  stock of CCM were listed on the New York Stock Exchange and the GDSs and the
  underlying shares were offered publicly in Mexico, the United States and elsewhere
  outside of Mexico.

Our deed of incorporation was executed on December 9, 1988 and we were registered
  in the Public Registry of Commerce in Mexico City on February 21, 1989, under
  the number 60562. The term of the Company is 99 years beginning on May 11, 1989.

Capital Expenditures

The following table sets forth our capital expenditures for each of the three
  years ended December 31, 1999, 2000, 2001 and the budgeted capital expenditures
  for 2002:

|Year ended December 31(1),                                                                                      
|----------------------------------------------------------------------------------------------------------------
|                                                                                                                
|(millions of constant Pesos as of December 31, 2001,
        except for 2002 amounts which are in nominal Pesos)
|Real estate                                                                                                     
|Store fixtures(3)                                                                                               
|Information systems                                                                                             
|                                                                                                                
|Total                                                                                                           

(1) Capital expenditures exclude Ps.263.2 in 1999, Ps.227.0 in 2000 and Ps.211.6
  in 2001 contributed by Costco to the Costco Mexico joint venture. 
  (2) Represents budgeted amounts for the year ending December 31, 2002. 
  (3) Represents store fixtures and other equipment expenditures.

Annually, we invest significant resources in areas such as construction, acquisition
  of equipment and the remodeling of stores. Since 1996, we have opened 23 stores
  and 17 restaurants. Additionally, 49 units have been remodeled and 9 units have
  been reconverted, to better serve the geographic areas where these stores are
  located. Similarly, we have invested significant resources in the construction
  of an efficient and reliable merchandise system.

The capital expenditures of Ps. 1,140.6 million in 2001 were funded with cash
  generated from operations. Our plans for 2002 are contingent primarily upon
  the economic situation in Mexico and our ability to generate sufficient cash
  flow to fund such expenditures. Depending upon these conditions, our goal is
  to open or commence construction on an aggregate of up to 9 stores and 8 restaurants
  in 2002, and to remodel 14 units.

We currently intend to fund substantially all of our 2002 capital expenditures
  primarily with cash flows from operations. Although we believe that sufficient
  financing will be available to us, there can be no assurance that we will have
  sufficient cash flow from operations to make all of our planned capital expenditures
  when scheduled or if necessary, that we will be able to obtain, or what the
  terms may be of, any bank or other financing. Costco is responsible for funding
  50% of the cost of the new Costco membership warehouses. See "Item 4. Information
  on the Company-Property, Plant, and Equipment" and "Item 3. Key Information-Risk
  Factors-Factors Relating to the Company-Growth Strategy Dependent Upon Continued
  Improvement of Mexican Economy."

Business Overview

General
  CCM is a holding company which, through its subsidiaries, operates the second
  largest retail company in Mexico, as measured by net sales in 2001, as well
  as a chain of family restaurants. In addition, we own a 50% interest in the
  Costco Mexico joint venture with Costco of the United States, which operates
  a chain of warehouse clubs in Mexico. Our retail operations sell a wide variety
  of food items, including basic groceries and perishables, and non-food items,
  which include general merchandise and clothing, with food items representing
  63.3% of our total sales in 2001. At December 31, 2001, we had 172 stores operating
  under five retailing formats (including stores operated by the Costco Mexico
  joint venture) with a total selling area of approximately 12.0 million square
  feet, concentrated primarily in the Mexico City metropolitan area and the central
  Mexico region, including Guadalajara, or the Central Region.

The Mexican retail sector is fragmented and consumers are served by a number
  of formats, including traditional formats such as independent grocery stores
  and food specialists, modern formats such as supermarkets, hypermarkets and
  department stores, as well as informal outlets such as street vendors and markets.
  We believe that there is considerable potential for growth as the Mexican retail
  sector continues its process of modernization. We believe that consumer preferences
  are shifting away from smaller, traditional and informal outlets toward larger,
  standardized supermarket and hypermarket chains, which offer consumers superior
  value through greater merchandise selection, convenience and better prices through
  the chains' greater purchasing power. Our strategy is designed to capitalize
  on this trend. Additionally, we believe that the recovery of consumers' purchasing
  power in Mexico and favorable demographics - approximately half of Mexico's
  population is under 21 years old - which will lead to increased numbers of consumers,
  will benefit the retail sector in the near and long terms.

Strategy
  Our strategies are designed to benefit from the modernization of the retail
  sector, building upon our position as one of Mexico's leading chains and our
  strong brand franchise. To achieve this goal, we pursue three primary strategies
  in the Mexican retail market.

Merchandising Strategy. Our merchandising strategy emphasizes
  competition on the basis of product selection, quality, price and consumer service.
  We target specific consumer preferences and demographics by using distinct retail
  formats which differ in store size, service level and product range. As Mexican
  consumer preferences have shifted toward large supermarkets and hypermarkets,
  we have met this demand by introducing our Mega format in 1993. In addition,
  we have sought partnerships with leading international retailers to introduce
  innovative formats to the Mexican market. In 1992 our Costco Mexico joint venture
  opened the first Costco Mexico warehouse club. Currently, we operate five retailing
  formats:

* Combination Supermarket/General Merchandise Stores. Through
  our flagship subsidiary "Comercial Mexicana," we operate combination self service
  supermarket/general merchandise stores under three formats: Comercial Mexicana
  stores (73 stores), which target middle and upper income segments; Bodega Comercial
  Mexicana stores (36 stores), which target lower income segments; and Mega (stores),
  super combination stores which carry the broadest line of products and complementary
  services in the combination store format and target a broad range of income
  levels. * Supermarkets. Under the name Sumesa, we currently operate 18
  neighborhood supermarkets. * Membership Warehouse Stores. Through the Costco Mexico joint
  venture we operate 20 self-service membership warehouse stores, targeting businesses,
  professionals and upper income customers, which offer members low prices on
  bulk purchases.

Operating Strategy. Our operating strategy emphasizes increased
  productivity and customer service through investment in information technology.
  From 1999 through December 31, 2001, we invested approximately U.S.$ 5.8 million
  in computer systems focused primarily on improving inventory efficiency, supply
  levels and controls. Innovative technologies used by our stores include point
  of sales systems (including bar code scanners), a unit inventory control system,
  fiber optic communications networks and an electronic communication system to
  submit purchase orders to suppliers. We believe that continued upgrading of
  our systems will allow it to further increase efficiencies, reduce expenses
  and provide the necessary product and sales information to enhance merchandising
  decisions at each store.

Growth Strategy. Our growth strategy is intended to take advantage
  of the fragmented nature of the Mexican retailing market and to strengthen our
  market penetration. Our growth strategy has two principal components: (i) continued
  improvements in same-store sales growth through enhanced merchandising techniques,
  attractive promotions, remodeling and expansion of selling area and (ii) new
  store openings both in areas where we already have a strong presence and in
  areas with high potential but which are currently underserved by modern retail
  formats. From 1996 and through 2000, we invested Ps.6,713.1 (nominal) million
  to open 11 Comercial Mexicana, 10 Mega, 6 Bodega, 17 Restaurantes California,
  1 Sumesa store and 6 Costco. During this period we also remodeled 49 units,
  converted 4 Comercial Mexicana stores into the Mega format and 4 Comercial Mexicana
  into the Bodega format also a Sumesa was converted into a Restaurante California.
  In 2001, we invested Ps.1,140.6 to open 1 Comercial Mexicana store, 3 Megas,
  1 Bodega Comercial Mexicana, 1 Costco membership warehouse, 1 Sumesa and 4 Restaurantes
  California. We also remodeled 5 units and converted 8 Comercial Mexicana 5 into
  the Bodega Comercial Mexicana format and 3 Comercial Mexicana into the Mega
  format. We intend to open 9 stores, 8 restaurants and remodel 14 units in 2002.
  In particular, we intend to continue the growth of the larger formats stores,
  such as Mega hypermarkets and Costco membership warehouses.

Since December 1994, when Mexico experienced an economic crisis, instability,
  increased inflation, high domestic interest rates, negative economic growth,
  increased unemployment, we have implemented a program to streamline operations
  in order to reduce operating expenses and increase cash flow while taking steps
  to minimize the effects of reduced purchasing power. During 2002, we expect
  to continue our aggressive program to reduce expenses at both our branches and
  at the corporate level in an effort to improve our operating margins. Economic
  conditions continued to improve in 2000 with gross domestic product increasing
  by 6.9% in 2000 as compared to 1999, but declined by 0.3% in 2001 as compared
  to 2000. In 1999, 2000 and 2001 the retail sector increased by 5.2%, 7.5% and
  6.9% respectively, while our total net sales increased by 2.8%, 6.8% and 0.2%
  during the periods. In response to the improving economic conditions, we resumed
  our growth strategy, with capital expenditures of Ps.989.2 million in 1999,
  Ps.1.308.1 million in 2000 and to Ps.1,140.6 million in 2001.

At December 31, 2001, we also operated a chain of 50 family-style restaurants
  under the name of "Restaurantes California". Restaurantes California provide
  customers with homemade-style food and high quality service at affordable prices.
  As part of our growth strategy, we intend to open eight new Restaurantes California
  by the end of 2002.

Seasonality Sales in our stores typically increase during the
  "Julio Regalado" and "Ofertas Mexicanas" and "Dale-Dale-Dale" special promotion
  occurring each July, September and during the Christmas season respectively.
  In 2000 and 2001, approximately 55.1% and 50.9% respectively, of our sales occurred
  during the last six months of the year, with an average of 27.4% in 2000 and
  22.7% in 2001 of such sales occurring in the last quarter of the year.

Retail Operations At December 31, 2001, we had 172 stores operating
  under five retailing formats with a total selling area of approximately 12.0
  million square feet. Although we operate nationwide, our stores are concentrated
  in the two most populated areas of Mexico, which are the Mexico City metropolitan
  area and the Central region. Our stores located in those areas account for approximately
  76.2% of our total retail floor space at December 31, 2001.

The percentage breakdown of our total selling area and number of stores by
  geographic region at December 31, 2001, is set forth in the following table:

|At December 31, 2001         
|-----------------------------
|                             
|Mexico City metropolitan area
|Central region               
|Northwest region             
|Northeast region             
|Southeast region             
|Southwest region             
|Total                        

The percentage breakdown of the contribution of our retail formats (including
  the Costco membership warehouses) and restaurants to total sales is set forth
  below for each of the three years ended December 31, 2001.

|Year Ended December 31,
|-----------------------
|                       
|Comercial Mexicana     
|Bodega                 
|Mega                   
|Sumesa                 
|Costco                 
|Restaurantes California
|Miscellaneous Income   
|Total                  

Except for Sumesa stores, which offer primarily food items, stores operated
  by us offer a combination of food and non-food items. Management classifies
  our sales into four main product lines. The percentage contribution to total
  sales of each of these product lines is set forth below for each of the three
  years ended December 31, 1999, 2000 and 2001.

|Year ended December 31,
|-----------------------
|                       
|Perishables            
|Groceries              
|General Merchandise    
|Clothing               
|Total                  

Our management believes that in recent years Mexican consumers have increasingly
  preferred stores that offer a combination of the wide variety of food items
  carried by conventional supermarkets as well as a variety of non-food items,
  such as general merchandise, clothing, household items and home improvement
  products. In response to this change in consumer preferences, our newer stores
  offer expanded perishable departments, prepared foods, tortilla presses and
  bakery goods as well as wider selections of health, beauty and pharmaceutical
  products.

Multiple Format Strategy. Retail operations are conducted by
  us through our five retailing store formats: Comercial Mexicana, Bodega, Mega,
  Sumesa and Costco membership warehouses (through the Costco Mexico joint venture).
  Through these formats, we are able to target nearly all the population segments
  in Mexico City and the other areas which we serve.

In opening new stores, we select the type of retail store and offers the merchandise
  and service mix which we consider most appropriate for each location's anticipated
  customer base. We determine a location's anticipated customer base by referring
  to a number of factors, including the current and expected future population
  density, income levels and competitive conditions surrounding that location.
  Decisions with respect to opening new Costco warehouses are made by the Costco
  Mexico joint venture.

We believe, based on changing demographics and competitive characteristics
  of the location surrounding an established store, in changing the retailing
  format of our retail sites when appropriate. For example, in 2001 three Comercial
  Mexicana were converted into a Mega and another five were converted into Bodega.
  In addition, since acquiring the Sumesa chain in 1981, we have converted six
  Sumesa stores into other formats. The conversion costs range from U.S.$2.1 million
  to U.S.$5.0 million per unit, averaging approximately U.S.$3.1 million per unit.
  Our current focus in this regard is to identify large Comercial Mexicana stores
  for conversion, if appropriate, into the Mega format.

While we currently expect to continue using our five retailing formats, we
  may experiment with additional formats in the future.

Retail Store Formats

We currently operate stores in the five retail formats discussed below.

Combination Supermarket/General Merchandise Stores

Comercial Mexicana. At December 31, 2001, we operated 73 Comercial
  Mexicana stores, including 19 in the Mexico City metropolitan area, 31 in the
  central region (including Guadalajara), 9 in the Northwest region (including
  Tijuana), 3 in the Northeast region, 5 in the Southeast region and 6 in the
  Southwest region. Comercial Mexicana stores are targeted at middle and upper-income
  customers.

Comercial Mexicana stores carry an extensive line of food items and non-food
  items. Food items include meats, poultry, fish, fresh fruits and vegetables,
  dairy products, baked goods, frozen goods, canned goods, prepared foods, delicatessen,
  wines and liquors and imported foods. Non-food items include men's, women's
  and children's clothing and shoes, paper products, office supplies, books and
  magazines, health and beauty products, garden supplies, automotive supplies,
  photographic supplies, electric appliances, sporting goods, toys and gifts and
  numerous household items. Almost all Comercial Mexicanas have one or more specialty
  departments, such as a bakery, tortilla press or video rental shop. Most Comercial
  Mexicana stores have pharmacies offering prescription and non-prescription medications.
  A typical Comercial Mexicana offers more than 55,000 products.

Most Comercial Mexicana stores are located in neighborhood shopping centers.
  Comercial Mexicana stores require large parking lots and access to roads to
  allow customers to drive to the stores.

Comercial Mexicana stores offer, at competitive prices, locally and nationally
  advertised and distributed brands of merchandise, together with certain food
  items, general merchandise and clothing product lines which are sold under our
  own private label names. Comercial Mexicana stores incorporate merchandising
  techniques, such as good lighting, wider-than-usual aisles and store layouts
  which are designed to encourage greater spending per customer. All Comercial
  Mexicana stores are identified by an easily recognizable pelican logo.

Comercial Mexicana remodeling generally involves the installation of new services,
  lighting, decorations, freezers and refrigerators and automated check-out counters,
  as well as the replacement of fixtures, painting and necessary repairs and changes
  in the store layout which are intended to make the stores more attractive to
  customers. At the same time, the store systems are upgraded to improve operating
  efficiencies and allow the introduction of new services. In 1999, 2000 and 2001,
  we remodeled six, three and four Comercial Mexicana stores, respectively.

Comercial Mexicana stores generally range in size from approximately 43,000
  to 107,000 square feet of selling area, with an average of approximately 68,000
  square feet. Comercial Mexicana stores employed 10,367 individuals at December
  31, 2001.

Bodega. At December 31, 2001, we operated 36 Bodegas, of which
  26 were located in Mexico City and its surrounding suburbs, eight were located
  in the Central region (including 2 stores in Guadalajara), one was located in
  the Southeast region and one in the Southwest region. During 2001, we opened
  one Bodegas in the Mexico City metropolitan area. Bodegas target lower-income
  customers.

Bodegas are warehouse stores which offer more than 30,000 products, mainly
  food items, pharmaceutical items and general merchandise of the type sold in
  Comercial Mexicana stores (but with less selection in terms of brands and sizes
  of items offered) at discount prices.

Bodegas are able to offer discount prices due to their lower operating costs
  as a percentage of sales than those of Comercial Mexicana stores. Lower operating
  costs are obtained primarily because Bodegas use less advertising and a lower
  level of customer service, fewer amenities, less decoration and reduced storage
  costs (because items are stocked on display on the sales floor). In addition,
  Bodegas have fewer promotions and product introductions. Most of the Bodegas
  have a tortilla press, a bakery and/or other specialty department. Because their
  customers generally do not have cars, Bodegas are within walking distance of
  residential areas or accessible by public transportation. Bodegas also are identified
  by the same easily recognizable pelican logo as Comercial Mexicana stores.

Bodegas range in size from approximately 24,000 to 65,000 square feet of selling
  area, with an average of approximately 50,600 square feet. Bodegas employed
  4,420 individuals at December 31, 2001.

Mega. Under the Mega format, we currently operate our largest
  combination stores. As of December 31, 2001, we operated 25 Megas, including
  13 in Mexico City, 9 in the Central Region, 2 in the North and one in the South
  Region. The Mega targets a broad range of economic groups.

We introduced the Mega format in 1993 to take advantage of the perceived potential
  of, and as a competitive response to, the supercenter and hypermarket formats
  which had begun to appear in Mexico. Prices in Megas are generally lower than
  those in Comercial Mexicana stores, but not as low as in Bodegas. Megas carry
  an array of items which is broader than that offered in Comercial Mexicana stores,
  offering approximately 60,000 products. The different types of merchandise carried
  by Megas are separated into distinct areas or departments. Each Mega contains
  a bakery, a pharmacy and other complementary services operated by us, just as
  in Comercial Mexicana stores. In addition, Megas contain separate specialty
  retail facilities leased to and operated by third-party tenants, such as banks,
  key makers, jewelry shops, shoe repair shops, photo developers and optical centers.
  Megas contain a wide center aisle that, in connection with the location of most
  perishables and groceries at the rear of the store, is intended to draw customers
  into the store past special advertising displays, as well as past the clothing
  and general merchandise areas.

Megas generally range in size from 110,000 to 140,000 square feet selling area,
  with an average of approximately 120,000. Megas employed 5,575 individuals at
  December 31, 2001.

Supermarkets

Sumesa. At December 31, 2000, we had 18 Sumesas in operation.
  Except for two Sumesas in Cuernavaca, all Sumesas are located in Mexico City.
  Sumesa stores are targeted from upper to upper-middle income customers.

Sumesas are designed to serve their surrounding neighborhoods, which typically
  are densely populated. Sumesas are smaller in size than Comercial Mexicana stores
  and Bodegas. Developed as neighborhood stand-alone supermarkets, Sumesas emphasize
  sales of quality groceries and perishables and carry more than 8,000 products.
  All Sumesas include pharmacies, as well as bakeries and tortilla presses.

We intend to remodel the existing Sumesas to update their appearance and, to
  the extent that space at existing locations permits, to include specialty departments.
  In 1996, we added specialty departments to four Sumesas. We remodeled one Sumesa
  store in 1999 and two in 2000. All three remodeled stores are located in Mexico
  City.

Sumesas generally range in size from approximately 7,000 to 11,800 square feet
  of selling area, with an average of approximately 8,600 square feet. Sumesa
  employed 786 individuals at December 31, 2001. Since acquiring Sumesa in 1981,
  we have closed seven locations, the last one in 1999, primarily because we were
  unable to agree to the lease renewal terms.

Membership Warehouse Stores

Costco Membership Warehouses. In June 1991, CCM and Costco formed
  a joint venture to develop the membership warehouse-style warehouses that are
  popular in the United States and Canada. The first Costco membership warehouse
  was opened in a suburb of Mexico City in February 1992. At December 31, 2001,
  the Costco Mexico joint venture was operating 20 Costco membership warehouses,
  five of which were located in Mexico City and its surrounding suburbs, seven were
  located in the Central Region (including one in Guadalajara), three were located
  in the Northwest Region, one was located in the Northeast Region, three in the
  Southeast Region and one in the Southwest Region.

Costco membership warehouses are self-service warehouse clubs which
  offer members low prices on volume purchases of a limited selection of branded
  and private label products in a wide range of merchandise categories in order
  to produce rapid inventory turnover and high sales volumes. This rapid inventory
  turnover, combined with the operating efficiencies achieved by direct volume
  purchasing from manufacturers and no-frills merchandise displays, which enables
  Costco Mexico to operate profitably albeit at lower gross margins than traditional
  wholesalers, retailers or supermarkets. Costco membership warehouses carry a
  selection of approximately 3,000 local and imported items, together with general
  merchandise products, offering a limited selection in each product line and
  are generally located in easily accessible locations. All of the Costco membership
  warehouses offer bakeries and a selection of high quality perishables and meats.

Membership is limited to businesses and professionals and members of their
  families. A primary membership, including one affiliate membership, currently
  costs Ps.300.0 (approximately U.S.$32.75) per year with one additional membership
  and each additional affiliate membership costs Ps.100.0 (approximately U.S.$11.0)
  per year. Costco membership warehouses seek to meet the needs of business customers
  who might otherwise pay a premium for small purchases or who cannot otherwise
  obtain the full range of their product requirements from any single source.
  In addition, these business members often combine personal shopping with their
  business purchases.

Costco membership warehouses range in size from approximately 90,000 to 120,000
  square feet of selling area, with an average of 100,000 square feet, and are
  designed with minimal amenities and decorations. Floor plans are designed for
  economical and efficient use of space and inventory control. Members push flatbed
  carts or large basket-style shopping carts through the warehouses, selecting
  products for their business or personal use, or for resale. Merchandise is generally
  offered in case, carton, or multiple-pack quantities or in single, jumbo-sized
  packages, and is displayed and stored in packing cartons on pallets and steel
  racks separated by extra-wide aisles. In response to the economic conditions
  in Mexico, in 1995 the Costco Mexico joint venture reduced the size of certain
  packages sold at the Costco membership warehouses and substituted imports with
  national products when available at an acceptable price and quality level. The
  standard no-frills facility designs, direct manufacturer purchasing and rapid
  inventory turnover, combined with extensive cost controls and low mark-ups,
  result in substantial savings to the customer as compared to most other traditional
  sources of merchandise. Costco membership warehouses employed 5,498 individuals
  at December 31, 2001.

The Costco Mexico joint venture is a corporation organized under the laws of
  Mexico and is owned equally by Costco and us. The joint venture is governed
  by a board of directors consisting of six members, three of whom are appointed
  by us (including the chairman of the board of the joint venture) and the other
  three are appointed by Costco. Pursuant to management agreements between Costco
  and the Costco Mexico joint venture, the joint venture is managed by officers
  appointed by Costco and approved by us. The management agreements may be terminated
  by either Costco or the Costco Mexico joint venture at any time, and any termination
  initiated by the joint venture must be approved by a majority (at least four
  directors consisting of two representatives of each of CCM and Costco) of its
  board of directors. The affirmative vote of a majority of the entire board of
  directors of the joint venture is required to approve certain significant decisions
  regarding the joint venture, including, among other things, certain revisions
  to the joint venture business plan, obligations or acquisitions of real estate
  or certain other fixed assets not otherwise provided for in the business plan,
  the removal of any of the management personnel appointed by Costco and certain
  transfers of ownership interests in the joint venture. In addition, the affirmative
  vote of both members of a two-person executive committee consisting of the chief
  executive officers of Costco and us is required to approve certain obligations
  not otherwise provided for in the business plan and other significant decisions
  regarding the joint venture which are not specially reserved for the board of
  directors.

The funding requirements of the joint venture are shared by Costco and us as
  determined from time to time by each party. Each of Costco and CCM contributed
  U.S.$11.5 million, U.S.$10.0 million and U.S.$28.5 million in 1999, 2000 and
  2001 respectively. In the event that either party defaults on its obligations
  to provide its portion of the funding for the joint venture, the other party,
  at its option, may, among other things, exercise its right to buy out the defaulting
  party's interest at fair market value. The joint venture agreement contains
  certain limitations on competition in the Price Club-style warehouse format
  by Costco and us. The joint venture has a duration of 99 years, ending 2090.
  However, the joint venture agreement may be terminated and the joint venture
  dissolved, (i) by mutual agreement of Costco and us, and (ii) upon a sale by
  either party of its entire interest in the joint venture by written agreement.
  We or Costco may purchase the other party's interest in the joint venture at
  a price determined by reference to the fair market value of that interest in
  the event that the other party (i) fails to provide its portion of the financing
  to the joint venture, (ii) fails to provide or maintain and guarantee pursuant
  to the joint venture agreement, (iii) transfers its interest to an unaffiliated
  third party without the consent of the board of directors of the joint venture,
  (iv) is unable to resolve with the other party within a prescribed period a
  deadlock of the board of directors, (v) is in default of its obligations under
  the joint venture agreement, (vi) is insolvent or bankrupt, or (vii) undergoes
  a change of control.

Marketing

We seek to attract customers to our store by emphasizing customer service,
  offering a wide selection of private label goods, facilitating purchase by customers
  through our own "captive" credit card, vouchers for payment, and a lay-away
  system under which customers can purchase general merchandise by agreed-upon
  partial payments and providing customers credit in connection with purchases
  of big-ticket items. Another marketing initiative includes promotions every
  Wednesday on fresh fruit and vegetables at Comercial Mexicana, Bodega and Mega
  stores, which has helped make Wednesday one of the busiest days of the week
  in our stores. In addition, we offer discounts during weekends on meat and cold
  meat products. In 1999, 2000 and 2001, we increased our advertising expenditures
  as compared to prior periods, contributing to an increase in sales during these
  periods. We intend to maintain advertising expenditures in 2002 substantially
  in line with the amount spent in 2001, which was 1.41 % of our total sales.

We emphasize customer service by (i) offering the product and service mix that
  we believe customers find most appealing, (ii) maintaining clear, well-lit stores
  with attractive, modern decor, (iii) training employees to be courteous and
  helpful, (iv) changing the mix of products to include a variety of imported
  goods and (v) in recent years, by offering butcher's shops, bakeries, pharmacies,
  tortilla presses and other specialty departments. Many stores have electric
  carts to enable elderly or disabled individuals to shop without assistance and
  shopping carts with infant seats to allow parents to shop with young children.
  The specialty departments, such as the butcher's shops and bakeries, offer products
  and individual service comparable to those offered in independent specialty
  stores. In addition, all stores with bar-code scanners have price verifiers
  located conveniently throughout the stores to allow customers to check the prices
  on goods. See "-Information Systems."

In recent years, we have begun to emphasize our own private label merchandise,
  including specialty products prepared by us (such as baked goods, tortillas
  and prepared foods), and currently offer approximately 419 private label products,
  principally groceries. In 1999, we introduced a line of generic medicines under
  the "Farmacom" name, that comply fully with the Ministry of Health regulations.
  On December 31, 2001 we offered over 150 medicines under this brand name. In
  addition, we offer private label men's, women's and children's clothing, household,
  automotive and gardening products. Each of our private label brands reflects
  a special image and delivers high quality merchandise at prices lower than brand
  name products. Sales of private label products as percentage of total sales
  were 10.3% in 1999, 11.5% en 2000 and 11.2% en 2001. Our margins on private
  label products are similar to those on brand name products, although prices
  on private label products are lower to the consumer.

Our store sales are paid in either cash, through credit or with vouchers. Credit
  card terminals are installed at checkout counters in all of our stores (including
  all Costco membership warehouses). We have our own captive credit card under
  the name "Comercial Mexicana," which can be used only for purchases at our stores
  (including Costco membership warehouses). The Comercial Mexicana credit cards
  are issued, and credit is extended under such cards, by Banco Nacional de Mexico,
  S.A., or Banamex. In addition, we offer our customers the option to acquire
  certain big-ticket items on credit through an in-store program known as Credicomer.
  This program, offered with Banco BBV- Bancomer S.A., or BBV- Bancomer, does
  not require a down payment and may be paid over a period to 12 months. BBV-Bancomer
  extends the credit and assumes 100% of the credit risk, and we receive an amount
  equal to the purchase price from BBV- Bancomer by the end of that same business
  day. We also established a lay-away system under which customers can purchase
  general merchandise by paying through installments, without interest. We believe
  that our relationships and discount arrangements with credit-issuing banks are
  the best in the market. The vouchers are issued by us and by certain independent
  companies, and are accepted in all of our stores except for the Costco membership
  warehouses. Employers distribute vouchers to their employees as a tax-advantaged
  part of the employee's compensation. The vouchers issued by us are sold at a
  discount to third-party employers and are, in effect, prepaid sales. The vouchers
  issued by independent companies are honored by us and then collected and presented
  (usually between one and seven days) to the issuing company for payment. In
  2001 we also introduced our "Seven Month Interest-Free" promotion which offers
  customers seven months of interest-free credit for certain large purchases when
  they use participating credit cards. The cost of the program is shared by the
  Company and the supplier.

As part of our marketing strategy, we promote our stores and the merchandising
  and services which they offer. Our advertising strategy and campaigns focus
  on communicating the image of our stores, particularly Comercial Mexicana stores,
  as being newer, cleaner stores which offer superior customer service. In addition,
  advertising is used to publicize the merchandise carried in our stores and to
  announce sales and special promotions. We used third-party advertising agencies
  to formulate and implement our advertising campaigns. The single largest advertising
  medium used by us is radio, but we also advertise on television and through
  newspapers and promotional flyers, as well as in our stores at the point of
  sale. We employ cooperative advertising with suppliers and suppliers participate
  in special programs with us, particularly in connection with new store openings.
  Promotional campaigns are launched throughout the year to coincide with holidays
  and other events. Each July, Comercial Mexicana, Bodega and Mega stores run
  the "Julio Regalado" special promotion to increase sales for that month.

The Costco Mexico joint venture does not generally use media advertising, except
  newspaper announcements of new Costco membership warehouse openings. When a
  new warehouse is opened, the Costco Mexico joint venture's marketing efforts
  include canvassing businesses in the area by marketing teams, and direct mailings
  to potential members in the area.

Distribution

We currently operate a 377,000 square foot distribution center in Mexico City.
  We rent a distribution facility of 417,000 square feet located in Mexico City,
  which we use to distribute primarily private label products and imported merchandise.
  Merchandise is shipped from the distribution centers to our retail stores primarily
  by independent shipping companies as well as Company-owned trucks. In 1997,
  we also opened a 538,000 square foot distribution center for Costco Mexico operations.

Approximately 20% of all goods purchased by us are supplied from the distribution
  centers operated by us. In the Costco Mexico joint venture, approximately 75%
  of all the merchandise is supplied from the distribution center. The remaining
  products are delivered by suppliers and independent distributors directly to
  our stores. We supply some goods through our own distribution system rather
  than with direct deliveries from suppliers and independent distributors in order
  to take advantage of quantity discounts for certain products and, in the case
  of other products, to assure an adequate source of supply.

Information Systems

We have placed special emphasis in recent years on the development of our management
  information system, particularly a unitary inventory control system which allows
  us to track sales, flow and turnover of specific product lines or items. The
  unitary inventory control system has been installed in all Comercial Mexicana
  stores, Bodegas and Megas and we plan to implement it in all of our units. As
  a part of this system, these stores are linked through a common computer network
  that facilitates the flow of information through fiber optic communications
  among the stores and to our management. This system provides us with information
  which enables us to (i) optimize inventory levels by identifying products with
  low sales volumes and by maintaining perpetual inventory booking, (ii) minimize
  shrinkage, (iii) reduce out-of-stock products, (iv) allow our buyers to negotiate
  more effectively with suppliers and (v) otherwise improve operating efficiency.
  This system is currently being used with substantially all of the suppliers
  that supply our stores. Related projects have focused on introducing advanced
  computer technology to the stores (other than, to date, most Sumesas), particularly
  at the point of sale, and have included the installation of improved cash registers
  with bar-code scanner systems and electronic scales, state-of-the-art credit
  card and debit card approval systems to track sales and reduce the check-out
  time for customers, and, in certain stores, state of the art point of sale computers
  which provide the customers additional information regarding the items being
  purchased and the relevant promotions and savings, as well as equipping stores
  with portable scanners to expedite the process of checking shipments from suppliers
  and to aid in price audits and taking inventory. Costco membership warehouses
  are linked, and transmit similar information, by satellite to Costco in San
  Diego, California and Seattle, Washington. Such linkage and transmission, in
  turn, provide us with information on the operations of Costco membership warehouses.

Capital expenditures for our information systems were Ps.11.3 million in 1999,
  Ps.20.1 million in 2000 and Ps.20.2 million in 2001.

Restaurants

At December 31, 2001, we had 50 Restaurantes California located in 16 cities
  in Mexico (28 of which are located in the Mexico City metropolitan area), with
  an average seating capacity of 222 seats per restaurant. Restaurantes California
  focus on middle- through upper-income customers and tourists.

In 1999, we opened four units and remodeled one unit. In 2000 we opened eight
  Restaurantes California and in 2001, we opened 4 Restaurantes California. We
  intend to open eight new Restaurantes California and remodel two additional
  units by the end of 2002. Our goal is to increase the number of Restaurantes
  California throughout Mexico.

Restaurantes California are family-style restaurants serving a wide variety
  of Mexican and continental cuisine for breakfast, lunch and dinner. These restaurants
  emphasize high-quality, homemade-style food with fast service at low prices,
  with an average lunch costing less than Ps.85.00 (approximately U.S.$9.1).

Meals at Restaurantes California are prepared fresh when ordered. To differentiate
  ourselves from our competitors, each Restaurante California also has a buffet
  and salad bar, and we emphasize sales of buffet-style food, and in some stores
  "super buffet," which generally have higher gross margins. The buffet sales
  in relation to total restaurant sales have increased from 49.0% for 1999, 54%
  for 2000 and 56.3% in 2001. Restaurantes California are designed and built to
  a standardized format and compete on the basis of their high-quality food and
  service, cleanliness, attractive architecture and decorations, hand-painted
  dishes, colorful menus and innovative promotions (such as free buffets for children
  accompanied by adult and the "Birthdays Don't Pay" campaign).

Restaurantes California have traditionally been located in commercial areas
  near a Comercial Mexicana store, but are increasingly being operated on a stand-alone
  basis. In choosing the sites for Restaurantes California, our real estate professionals
  consider criteria similar to those used in selecting store sites. All products
  used in the operation of Restaurantes California are delivered directly to the
  restaurants by suppliers. Restaurantes California generally do not use media
  advertising. At December 31, 2001, Restaurantes California had 2,516 employees.

Suppliers

We purchase the products frequently carried or used by our stores and restaurants
  from more than 6,050 suppliers. No single supplier or group of related suppliers
  accounts for more than 2.8% of the total products purchased by us. Our management
  believes that the sources and availability of materials for our retail store
  and restaurant operations are adequate and will continue to be so for the foreseeable
  future.

Certain suppliers prepare items for us for sale under our private label brand
  names, and expect that the source and availability of private label products
  will be adequate in the foreseeable future. We have not experienced any difficulty
  in obtaining the types or quantities of the merchandise we require on a timely
  basis and believe that, if any of our current sources of supply were to become
  unavailable, alternative sources could be obtained without any material disruption
  of business.

We maintain a centralized purchasing department which specializes in perishables,
  groceries, clothing and other merchandise through four principal groups. One
  group within the purchasing department is responsible for the Comercial Mexicana
  stores, Megas, Bodegas and Sumesas. A second group is responsible for purchasing
  the products required by Restaurantes California. A third group, consisting
  of two separate teams of buyers for Costco membership warehouses, is responsible
  for determining and purchasing the items carried in the Costco membership warehouses.
  One Costco Mexico purchasing team is located in Mexico and is responsible for
  purchasing domestic products. The other Costco Mexico purchasing team is located
  in San Diego, California, operating with the support of Costco. The separate
  groups of buyers allow each group to focus on the needs of the target customers
  for the retailing store formats serviced by that group of buyers. These purchasing
  groups coordinate with one another, sharing information on suppliers and the
  terms and conditions on products offered by suppliers. The buyers determine
  the products that will be stocked in our stores and are responsible for maintaining
  our relationships with our suppliers and negotiating the prices of all goods
  stocked in our stores and products required by our restaurants. The centralized
  purchasing department orders approximately 40% of the goods stocked in our stores
  and most of the balance is ordered by store managers pursuant to the arrangements
  (including prices) with suppliers negotiated by the central purchasing department.

We seek to obtain the best available terms on price and credit from our suppliers,
  and cooperate with suppliers in developing advertising and special promotions
  of products. We believe that communication through our information systems have
  allowed us to negotiate more effectively with suppliers and that we conduct
  business with our suppliers on terms which are not less favorable than those
  generally available in the retail industry. Domestic suppliers are paid in Pesos
  on terms that vary with the product being purchased. Foreign suppliers are paid
  in foreign currencies, primarily U.S. dollars.

In 1999, 2000 and 2001 approximately 15.6%, 16.9% and 16.5% respectively, of
  our sales consisted of products imported from outside of Mexico. In addition,
  we sell certain imported products which we acquire, at prices denominated in
  Pesos, from multinational corporations, distributors and wholesalers in Mexico.

Competition

The retail industry in Mexico is highly competitive and is characterized by
  high inventory turnover and small profit margins as a percentage of sales. Earnings
  primarily depend upon the maintenance of high per-store sales volumes, efficient
  product purchasing and distribution and cost-effective store operations. Margins
  at our stores are affected by advertising and promotional expenses that are
  necessary to maintain our competitive position in our major markets. We compete
  with numerous local companies and regional and national supermarket and self-service
  store chains, including Gigante and Soriana, as well as small family-owned neighborhood
  stores and street markets, in each region in which we do business. In addition,
  certain major United States and international retailers have established joint
  ventures with Mexican companies or have acquired the majority of shares to control
  businesses which compete with our stores (for example, Wal-Mart Stores, Inc.,
  or Wal-Mart, controls Walmex). The Costco membership warehouses compete with
  Sam's Club, a self-service warehouse owned by Walmex, and our hypermarkets and
  other stores face competition from Auchan. We expect that other United States
  and international retailers may enter the market in Mexico in the future either
  through joint ventures or directly. In addition, certain of our stores which
  are located in the same shopping areas compete with each other. We believe that
  our principal competitive factors for our stores are location, price, cleanliness,
  promotion, customer service and quality of merchandise. See "Item 3-Key Information-Risk
  Factors-Factors Relating to the Company-Competition."

In 2001, we were the second largest retail company in Mexico as measured by
  net sales. We have a significant presence in the Mexico City metropolitan area
  and the Central Region, where approximately 76.2% of the selling area of our
  stores are located as of December 31, 2001.

The restaurant business in Mexico is also highly competitive. Restaurantes
  California compete with numerous regional and national fast-food restaurant
  chains, local restaurants and prepared food establishments and street markets.
  In addition, certain United States fast-food restaurant chains (such as McDonalds,
  Burger King, Kentucky Fried Chicken, Dominos Pizza and Pizza Hut) have opened
  restaurants in Mexico. We believe that Restaurantes California compete on the
  basis of high-quality food, fast service, cleanliness, attractive architecture
  and decoration and innovative promotion.

Government Regulation

Aspects of the retail restaurant business, including our Restaurantes California
  operations, are subject to regulation directly or indirectly by various Mexican
  federal, state and local governmental agencies. The most significant of these
  agencies are the Secretaria de Economia, or the Ministry of Economy, and the
  Secretaria de Salud, or Ministry of Health, of Mexico.

The Ministry of Economy regulates the prices at which we can sell some medicines.
  The Ministry of of Economy also verifies that all imported products have a label
  in Spanish specifying the product's origin and ingredients and the company importing
  the product. In addition, pursuant to a system of voluntary price control guidelines
  under the Mexican Government's economic plan, we may increase prices only in
  response to price increases agreed upon between industry representatives and
  the Ministry of Economy. We believe that these price controls do not and will
  not have a material impact on our operation. See "Item 3-Key Information-Risk
  Factors-Price Controls Relating to Certain of Our Products."

The Ministry of Health establishes minimum standards for cleanliness of our
  stores and restaurants. We believe that we are in compliance in all material
  respects with the regulations of the Ministry of Economy and that our operations
  meet or exceed all requirements imposed by the Ministry of Health.

We maintain licenses, such as licenses to sell liquor, which are granted by
  governmental agencies and which we consider important to our business.

Our compliance with Mexican federal, state and local provisions that regulate
  the discharge of materials into the environment has not had and is not expected
  to have a material effect upon our capital expenditures, earnings or competitive
  position.

Trademarks

We own and use various trademarks in our business, the most important being
  "Comercial Mexicana," "Bodega Comercial Mexicana," "Sumesa," "Mega Comercial
  Mexicana," "Restaurantes California," and the pelican symbol identified with
  our stores. In addition, the Costco Mexico joint venture has a license from
  Costco to use in Mexico the service marks "Price Club", "Price Costco" and "Costco".
  We actively protect our intellectual property rights.



Following is a list of our significant subsidiaries, all of which are incorporated
  in Mexico:

|                                      | Activity as of December 31, 2001                  | Percentage Ownership as of December 31, 2001
|------------------------------------- | ------------------------------------------------- | --------------------------------------------
|Subsidiary holding companies:         |                                                   |                                             
|Comercial Mexicana, S. A. de C.V.     | Operate a chain of 134 stores.                    | 99 %                                        
|Super Mercados, S. A. de C. V.        | Operate a chain of 18 stores.                     | 99 %                                        
|Restaurantes California, S.A. de C.V. | Operate a chain of 50 restaurants.                | 99%                                         
|Costco de Mixico, S. A. de C. V.      | Operate a chain of 20 membership warehouse stores | 50 %                                        
|Subsidiary real estate companies:     |                                                   |                                             
|Real estate subsidiaries              | Operate as a real estate group.                   | 99 %                                        
|Subsidiary service companies:         |                                                   |                                             
|Subsidiary service companies          | Operate as a services group.                      | 99 %                                        

The Company consolidates the accounts of all of its majority owned subsidiaries.
  See Note 18 of our Financial Statements.

The Company's investment in Costco Mexico meets the joint control criteria
  discussed in Internation Accounting Standard No. 31. Accordingly, we report
  under the proportionate consolidation method.

Property, Plant and Equipment

Our properties primarily consist of different store formats, restaurants and
  distribution centers, most of which are located in Mexico City. In addition,
  as of December 31, 2001, we had approximately 9.2 million square feet in land
  reserve. Our principal executive offices are located in Mexico City.

We currently operate a 377,000 square feet distribution center in Mexico City.
  Since 1994, we have rented a distribution facility of 417,000 square feet located
  in Mexico City, which we use to distribute primarily private label products
  and imported merchandise. Merchandise is shipped from the distribution centers
  to our retail stores primarily by independent shipping companies as well as
  Company-owned trucks. The Costco Mexico joint venture operates a distribution
  center of 538,000 square feet for Costco Mexico operations.

We own, develop and lease real estate to support our operations and expansion
  plans. We continuously study potential new locations and make decisions regarding
  new stores and restaurant locations based on, among other things, the location's
  population, income demographics, traffic, public transportation, access to streets,
  zoning and other services and facilities. The Costco Mexico joint venture uses
  similar criteria to select suitable real estate for its operation.

As of December 31, 2001, we owned approximately 75.9% of the land on which
  our stores are located, and own the land on which 29 of the 50 Restaurantes
  California are located. Substantially all of the remaining land on which our
  stores and restaurants are located is leased from independent third parties.
  Leases generally have a 10 to 15 year term, with one or more options to extend
  or renew. Approximately 85% of our stores and restaurants which lease land (representing
  27% of our total stores and restaurants) have leases which will expire between
  2000 and 2010. The lease agreements for the stores and restaurants generally
  provide for rent payments calculated as a percentage of monthly net sales, ranging
  from 1.5% to 2.5%, with a minimum guaranteed rental. Given the high cost of
  property in the Mexico City metropolitan area and the increased availability
  of leasehold interests, we intend to emphasize renting the properties on which
  we build new stores and restaurants. When we purchase additional real property
  in the future, we plan to make these acquisitions through a combination of new
  financing arrangements and cash from operations.

The following table sets forth our owned and rented retail space by total area,
  percentage of total area and number of our stores at December 31, 2001.

|At December 31, 2001
|--------------------
|                    
|Owned properties    
|Leased properties   
|Total               

The following table sets forth our owned and rented retail space by store format,
  total area and number of stores at December 31, 2001.

|At December 31, 2001
|--------------------
|Store Format        
|Comercial Mexicana  
|Bodega              
|Mega                
|Sumesa              
|Costco Mexico       

Our real estate subsidiaries have also engaged in the development of shopping
  centers in which Comercial Mexicana stores have participated as anchor tenants,
  with the remaining floor space being leased to third parties. Currently we have
  over 1,473 commercial tenants, with approximately 1,613,627 square feet under
  lease, from which we receive income.

We have a land reserve of unimproved land for future development of approximately
  7.8 million square feet in the Central Region, the Mexico City metropolitan
  area and other cities in Mexico, which management expects will be sufficient
  for substantially all of our expansion plans for 2002 and 2003 whether or not
  economic conditions in Mexico continue to improve. Because it is increasingly
  difficult to locate, at economical prices, the larger plots of land suitable
  for store sites, we are increasingly looking at land outside of Mexico City,
  primarily in the suburbs of Mexico City and the Central Region.

Insurance

We maintain all risk and first loss insurance policies (including insurance
  for losses resulting from hurricanes and earthquakes) and business interruption
  insurance with an insurance value up to Ps.22.7 billion (calculated on the basis
  of the maximum foreseeable loss) with a maximum per claim of Ps.1.9 billion
  (calculated on the basis of the maximum foreseeable loss) per location, and
  a limit up to Ps.5.8 billion per event. The fixed assets at each of our locations
  are covered on a replacement cost of market value basis. We also maintain a
  transit insurance policy that protects against loss for shipment up to Ps.8.5
  million per shipment. We maintain comprehensive liability insurance policies
  with an insured limit of up to Ps.300.0 million per event per location.

Item 5. Operating and Financial Review and Prospects

The following discussion should be read in conjunction with our Financial
  Statements and notes thereto included elsewhere in this annual report. Our Financial
  Statements have been prepared in accordance with Mexican GAAP, which differs
  in significant respects from U.S. GAAP. Note 19 to our Financial Statements
  provides a description of the relevant differences between Mexican GAAP and
  U.S. GAAP as they relate to us, and a reconciliation to U.S. GAAP of net income
  for the years ended December 31, 1999, 2000 and 2001 and stockholders' equity
  as of December 31, 2000 and 2001. In addition to the other information in this
  annual report, investors should consider carefully the following discussion
  and the information set forth under "Key Information - Risk Factors" in evaluating
  us and our business.

General

CCM is a Mexican company which maintains its financial records in Pesos. Mexican
  GAAP requires that all financial information be presented in constant Pesos
  (having the same purchasing power for each period indicated taking into account
  inflation) as of the date of the most recent balance sheet. The presentation
  of financial information in constant Pesos is intended to recognize certain
  effects of inflation on the Financial Statements and to permit comparisons between
  comparable periods in comparable monetary units. The result of this adjustment
  is that growth rates between periods are stated in "real" terms, eliminating
  the general effects of inflation. Except where otherwise indicated, financial
  data for all periods in the Financial Statements and throughout this Annual
  Report have been restated in constant Pesos with purchasing power as of December
  31, 2001. See Note 3 to the Financial Statements. References in this Annual
  Report to "real" amounts are to inflation-adjusted numbers and "nominal" amounts
  are to unadjusted numbers. Unless otherwise specified, all growth rates in the
  following discussion are stated in real terms.

Mexico experienced inflation in certain of the periods covered by the
  Financial Statements. In 1999, 2000 and 2001 the annual rates of inflation in
  Mexico, as measured by changes in NCPI, were 12.3%, 9.0% and 4.4% respectively.

Bulletin B-10 requires us to restate non-monetary assets with the exception
  of inventories and fixed assets of non-Mexican origin, using the National Consumer
  Price Index (Indice Nacional de Precios al Consumidor), or NCPI. Inventories
  are stated at cost using the retail method, which is equivalent to replacement
  cost. The cost of sale is restated using methods that recognize the replacement
  cost of merchandise at the time of sale (last-in, first-out).

In accordance with Bulletin B-10 we are required to report, as a gain or loss
  on our net monetary position, the effects of inflation on our monetary assets
  and liabilities. This net amount reflects the gain or loss arising from holding
  net monetary liabilities or assets in an inflationary period because over time
  a monetary liability can be settled for units of less purchasing power whereas
  a monetary asset decreases in value in real terms.

All amounts in the following discussion include the operations of Restaurantes
  California and other operations (which represented in the aggregate approximately
  1.3% of net sales for the year ended December 31, 2001).

Effects of Devaluation and Inflation

The following table sets forth, for the periods indicated, the percentage
  that the Mexican Peso devalued or appreciated against the U.S. Dollar, the Mexican
  inflation rate, the U.S. inflation rate, the percentage that Mexican gross domestic
  product, or GDP, changed as compared to the previous year and the percentage
  change in the Mexican retail sector as compared to the previous year.

|Year ended December 31,                                                               
|--------------------------------------------------------------------------------------
|                                                                                      
|Devaluation (appreciation) of the Mexican Peso as compared
      to the U.S. Dollar(1)
|Mexican inflation rate(2)                                                             
|U.S. inflation rate                                                                   
|Increase (decrease) in Mexican gross domestic product                                 
|Increase in the Mexican retail sector(3)                                              

(1) Based on changes in the Representative Rate, at the beginning of each period,
  which were as follows: Ps.9.500 per U.S. Dollar as of December 31, 1999; Ps.
  9.6500 per U.S. Dollar as of December 31, 2000 and Ps.9.1600 per U.S. Dollar
  as of December 31, 2001. 
  (2) Based on changes in the NCPI from the previous period, as reported by Banco
  de Mexico. 
  (3) As reported by the National Association of Self-service and Department Stores,
  or ANTAD.

The general condition of the Mexican economy, inflation and high interest rates
  have adversely affected, and may in the future adversely affect, our financial
  conditions and results of operations in the following manner:

* As of December 31, 2001, approximately U.S.$130.0 million of our outstanding
  indebtedness was denominated in U.S. Dollars, of which U.S.$50.0 million represents
  forward contracts. See "-Liquidity and Capital Resources." Our only U.S. Dollar-denominated
  monetary asset as of December 31, 2001 was U.S.$23.2 million of cash. 
  * Inflation also affects consumer demand, our ability to raise prices, supplier
  price, employment rates, competitive factors and consumer purchasing power.

See "-Results of Operations," "-Comparison of Fiscal Years Ended December 31,
  2001 and December 31, 2000-Net Sales" and "-Integral Results of Financing,"
  "Liquidity and Capital Resources" and "-Recent Operating Results."See also "Item
  3. Key Information-Risk Factors-Risks Factors Relating to Mexico-Mexican Governmental,
  Political, Economic and Social Factors" and "-Currency Fluctuations and Exchange
  Controls" and "Item 10. Other Information-Exchange Controls and Restrictions
  on Foreign Investment."

Critical Accounting Policies

We prepare our consolidated Financial Statements according to accounting principles
  generally accepted in Mexico. As a result, we are required to make certain estimates,
  judgements and assumptions that we believe are reasonable based upon the information
  available. These estimates and assumptions affect the reported amounts of assets
  and liabilities at the date of the Financial Statements and the reported amounts
  of revenues and expenses during the periods presented. The significant accounting
  policies which we believe are the most critical to aid in fully understanding
  and evaluating our reported financial results include:

Inventories

Inventories are valued under the retail inventory method, or RIM. Under RIM,
  the valuation of inventories at cost and the resulting gross margins are calculated
  by applying a calculated cost-to retail ratio to the retail value of inventories.
  RIM is an averaging method that has been widely used in the retail industry
  due to its practicality. The use of RIM results in an inventory valuation at
  the lower of cost or market when markdowns are currently taken as a reduction
  of the retail value of inventories.

Inherent in the RIM calculation are certain significant management judgments
  and estimates including, among others, merchandise mark-ups, markdowns and shrinkage,
  which significantly impact the ending inventory valuation at cost as well as
  resulting gross margins. To reduce the potential for distortion in the valuation
  of inventory, the Company's RIM utilizes four different categories (Groceries,
  General Merchandise, Clothing and Perishables) divided into several sections
  or departments in which similar classes of merchandise inventories are valued
  under the same standards.

Revenue recognition

Our principle source of income is derived from sales to customers in the self-
service supermarket/general merchandise stores. Revenue is recognized at the point
 of sale, except for the layaway transactions that are recognized when the customer
satisfies all payment obligations and takes possession of the merchandise.
Defective merchandise returned by customers is either returned to the supplier of is
change and reimbursement is sought from the supplier. Supplier allowance and discount
received by the Company are included in the income statement when the purpose for
which those monies were designated is fulfilled.

Discounts, price reductions and sales returns are netted out of the net income
  .We monitor our revenue recognition figures using a variety of tools. One of
  our most important tracking tools are the daily revenue reports received by
  the stores which are reconciled with register reports and receipts. This information
  is gathered at the store level, then combined and reviewed in our central accounting
  department, in order to identify any possible distortion.

Accounting for income taxes

In the preparation of our consolidated Financial Statements we are required
  to estimate our expected income taxes. This process involves an estimation of
  our actual current tax and an assessment of temporary differences resulting
  from differing treatment of items for tax and accounting purposes. These differences
  result in deferred asset and liabilities, which are included within our consolidated
  balance sheet. We must then assess the likelihood that our deferred as assets
  will be recovered from future taxable income and to the extent we believe that
  recovery is not likely, we must establish a valuation allowance. To the extent
  we establish a valuation allowance or increase this allowance in a period, we
  must include a charge against the tax provision in the statement of operations.

Significant management judgment is required in determining our provision for
  income taxes, our deferred tax assets and liabilities and any valuation allowance
  recorded against our net deferred tax asset. The valuation allowance is based
  on our estimates of taxable income and the period over which our deferred tax
  asset will be recoverable. In the event that actual results differ from these
  estimates or we adjust these estimates in future periods we may need to establish
  an additional valuation allowance which could materially impact our financial
  position and results of operations.

Property, equipment and leasehold improvements

Property, equipment and leasehold improvements are recorded at cost and are
  depreciated on straight-line basis over the estimated useful lives of such assets.
  Changes in circumstances can result in the actual useful life differing from
  previous estimates.

Property, equipment and leasehold improvements, including buildings, store
  fixtures, electronic equipment, leasehold improvement and machinery and equipment,
  are reviewed by the Company annually or whenever events or changes in circumstances
  indicate that the carrying amount of any of such assets may not be recoverable.

Results of Operations

General

The following table sets forth income statement data for the years ended December
  31, 2001, 2000 and 1999 as presented in our Financial Statements, expressed
  as a percentage of consolidated net sales.

|Year Ended December 31,                              
|-----------------------------------------------------
|                                                     
|Net sales                                            
|Cost of sales                                        
|Gross profit                                         
|Operating expenses:                                  
|Selling (net of depreciation and amortization)       
|Administrative (net of depreciation and amortization)
|Depreciation and amortization                        
|Total operating expenses                             
|Operating income                                     
|Integral results of financing:                       
|Interest expense                                     
|Interest income                                      
|Gain from repurchase of Senior Notes                 
|Foreign exchange loss, net                           
|Gain from monetary position                          
|Total integral results of financing                  
|Other income (expense) and special item (2)          
|Provisions for:                                      
|Income tax and asset tax                             
|Employees' profit sharing                            
|Deferred income taxes                                
|Income before minority interest                      
|Minority interest                                    
|Net income                                           

(1) Columns may not add due to rounding.

Segment Disclosures

Our business is operated in three segments: (1) the CCM Group, which includes
  the Comercial Mexicana, Bodega and Mega supermarkets, and comprises our core
  business (2) the Costco Mexico Group, which operates Costco Mexico, our joint
  venture with Costco Companies, Inc., and (3) the Other Group, which includes
  Restaurantes California and our Sumesa stores. Operating decisions are made
  separately for Costco Mexico. Under Mexican GAAP, segment disclosure must be
  made in respect of net sales, revenues from external customers, depreciation
  and amortization, net income and certain balance sheet items. Information about
  our reportable segments is provided below.

|As of and for the year ended December 31,
      2001(1) (2)
|-----------------------------------------------------------
|                                                           
|Revenue from external customers                            
|Inter-segment revenues                                     
|Depreciation and Amortization                              
|Interest expense                                           
|Interest income                                            
|Income taxes(4)                                            
|Extraordinary gain                                         
|Net income                                                 
|Long-lived assets                                          
|Significant liabilities                                    
|Capital expenditures                                       

|As of and for the year ended December 31,
      2000(1) (2)
|-----------------------------------------------------------
|                                                           
|Revenue from external customers                            
|Inter-segment revenues                                     
|Depreciation and amortization                              
|Interest expense                                           
|Interest income                                            
|Income taxes(4)                                            
|Extraordinary gain                                         
|Net income                                                 
|Long-lived assets                                          
|Significant liabilities                                    
|Capital expenditures                                       

|As of and for the year ended December 31,
      1999(1) (2)
|-----------------------------------------------------------
|                                                           
|Revenue from external customers                            
|Inter-segment revenues                                     
|Depreciation and amortization                              
|Interest expense                                           
|Interest income                                            
|Income taxes(4)                                            
|Extraordinary gain                                         
|Net income                                                 
|Long-lived assets                                          
|Significant liabilities                                    
|Capital expenditures                                       

(1) In thousands of Pesos in purchasing power as of December 31, 2001. 
  (2) See Note 18 of the Financial Statements. 
  (3) The elimination column refers to the inter-segment lease revenues of the
  real estate subsidiaries of CCM and the Costco Mexico and the 50% of Costco
  Mexico not owned by the Company. 
  (4) Amounts include current and deferred income tax, asset tax and employee's
  profit sharing.

Comparison of fiscal years ended December 31, 2001 and December 31, 2000.

As of December 31, 2001, we had 172 stores and 50 restaurants in operation,
  as compared to 167 stores and 46 restaurants as of December 31, 2000.

In 2001, we opened one Comercial Mexicana store, one Bodega, three Megas, one
  Costco Membership Warehouse Club, one Sumesa and four Restaurantes California.
  In addition, five of our retail stores were remodeled and eight Comercial Mexicana
  stores were converted into five Bodegas and three Mega hypermarkets. The total
  retail selling area increased 4.0% from 11,552,165 square feet in 2000 to 11,997,958
  square feet at the end of 2001. See "Item 4. - Information on the Company-History
  and Development of the Company".

Net Sales. Net sales increased 0.2% from Ps.33,001.7 in 2000
  to Ps.33,063.0 in 2001. Same store sales decreased 3.3% during this period.

The Company's net sales were influenced by an adverse economic environment
  which resulted in increased unemployment and decreased consumer demand, increased
  competition and the loss of the contract with the Mexico City government. Divided
  by segment, the CCM Group had a 2.2% net sales decrease, the Costco Mexico Group
  has a net sales increase of 13.1%and the Other Group had a 4.3% sales increase.

We attribute the slow growth in sales in the CCM Group to a steady increase
  in competition in the sector as well as the general slowdown of the Mexican
  economy. We also attribute the slow growth in this segment to the loss of a
  significant contract which we held with the local government of Mexico City.
  The Costco Mexico Group net sales increased primarily as a result of the growing
  popularity of membership warehouse stores. The increase in the net sales of
  the Other group result mainly from the financial stability of its customers
  in economically uncertain times.

Non-food sales as percentage of net sales remained constant at 36.7%.

Sales per square feet decreased 2.0%, to Ps.3,153.6 per square foot in 2001,
  from Ps.3,218.3 in 2000. Net sales by operating employee increased 16.0% from
  Ps.1,201.7 thousand per employee in 2000 to Ps.1,393.6 thousand in 2001. This
  increase was mainly attributable to a reduction in headcount.

Cost of Sales. Cost of sales increased 0.3%, from Ps.26,695.3
  million in 2000 to Ps.26,773.4 million in 2001.

Gross profit as a percentage of net sales was 19.0% in 2001, compared to 19.1%
  in 2000 due to more aggressive promotional campaigns and to the continued increase
  of participation of the Costco membership warehouses in our total sales. The
  Costco Mexico Group's gross margin is lower than the gross margin of the CCM
  Group primarily as a result of bulk sales at the Costco membership warehouses.
  The Other Group's margins are higher than those of the CCM Group and the Costco
  Mexico Group, but this Group accounts for a very small portion of the Company's
  overall gross profits.

Operating Expenses. Total operating expenses increased 2.2%,
  from Ps.5,149.6 million in 2000 to Ps.5,262.0 million in 2001. Operating costs
  as a percentage of net sales increased from 15.6% in 2000 to 15.9% in 2001 as
  a result of salary increases that exceeded the rate of inflation.

Selling expenses (net of depreciation and amortization) increased 4.6%, to
  Ps.3,893.1 million in 2001, from Ps.3,723.2 million in 2000, representing 11.3%
  of net sales in 2000 and 11.8% of net sales in 2001, respectively. Selling expenses
  include mainly salaries, advertising and rents. Selling expenses increased mainly
  as a result of salary increases and employee bonuses.

Administrative expenses (net of depreciation and amortization) decreased 12.5%,
  to Ps.685.7 million in 2001, from Ps.783.8 million in 2000, representing 2.4%
  of net sales in 2000 and 2.1% of net sales in 2001. Administrative expenses
  decreased mainly as a result of reductions in salary expenses which resulted
  from a reduction in administrative employees, leasing payments, energy and maintenance
  expenses.

Depreciation and amortization increased 6.3%, to Ps.683.2 million in 2001,
  from Ps.642.4 million in 2000, representing 2.0% of net sales in 2000 and 2.1%
  of net sales in 2001, as a result of the new store openings. Depreciation and
  amortization in the CCM Group increased by 2.4%, to Ps.577.8 million in 2001
  from Ps.564.4 million in 2000, while depreciation and amortization in the Costco
  Mexico Group increased by 40.4%, to Ps.180.1 million in 2001 from Ps.128.3 million
  in 2000. The Other Group had a 10% increase in depreciation and amortization,
  from Ps. 13.9 million in 2000 to Ps. 15.3 million in 2001.

As a result of the above, operating income decreased 11.2%, to Ps.1,027.6 million
  in 2001, from Ps.1,156.9 million in 2000, representing 3.1% and 3.5% of net
  sales in 2001 and 2000, respectively.

Integral Results of Financing. Interest expense increased 20.8%,
  to Ps.296.8 million in 2001, from Ps.245.7 million in 2000, mainly as a result
  of an increase in banking commissions payments we incurred in connection with
  our "Seven Months Interest-Free" promotion as well as the recognition of the
  interest expense of certain interest rate hedging activities. See "Business
  Overview-Marketing" and "Quantitative and Qualitative Disclosures About Market
  Risk". The weighted average effective interest rate on our debt was 8.0% in
  2001 compared to 9.0 in 2000 (including, in each case, additional amounts currently
  payable in respect of certain Mexican withholding taxes). See Note 8 regarding
  the Company's debts in 2000 and 2001, "Liquidity and Sources of Financing".

Interest income increased 0.6%, to Ps.55.5 million in 2001, from Ps.55.2 million
  in 2000, despite the decrease in nominal interest rates. Such change was due
  primarily to better cash flow management. See "Cash Policy".

During 2001 we recognized foreign exchange gains of Ps.22.4 million compared
  to Ps.54.4 million foreign exchange loss in 2000, mainly due to 5.1% appreciation
  of peso against dollar in 2001 as compared to a 1.6% depreciation in 2000.

Gain from monetary position decreased 51.7% from Ps.474.0 million in 2000 to
  Ps.228.8 million in 2001 due mainly to a lower inflation rate of 4.4% in 2001
  as compared to 8.9% in 2000.

As a result of the above, integral results of financing decreased 95.7% from
  $229.2 million in 2000 to $9.9 million in 2001.

Other (Expense).Other expenses decreased 88.2%, from Ps.149.4
  million in 2000 to $17.6 million in 2001. This decrease resulted from our sale
  of certain permanent investments.

Taxes and Employees' Profit Sharing. In 2001, we paid Ps.23.8
  million in asset tax and Ps.14.2 million in income tax as compared to Ps.125.5
  million asset tax and Ps.10.8 million in income tax in 2000.

As a result of the amendments to the Income Tax Law approved on January 1,
  2002, beginning in 2003, the income tax rate (35%) will be reduced annually
  to a nominal rate 32% in 2005. Deferred taxes reflects a net variation of 403.0%
  (including the gain on monetary position through the initial deferred income
  tax effect) from Ps.70.3 million credit in 2000 to Ps.212.8 million expense
  during 2001. See Note 15 to our Financial Statements.

Our provision for employees' profit sharing payment decreased from Ps.12.1
  million in 2000 to Ps.1.6 million in 2001, representing 1.0% and 0.2% of profit
  before taxes in 2000 and 2001, respectively, as a result of the decrease in
  net income.

Minority Interest. Participation of minority stockholders in
  the subsidiaries profits and losses reflects that part of the subsidiaries'
  operation losses and profits corresponding to third parties.

Net Income. As a result of the above, net income decreased 34.0%
  from Ps1.150.8 million during 2000 to $759.3 million during 2001. Net income
  as percentage of net sales was 3.5% during 2000 compared to 2.3% during 2001.
  Divided by segment, the CCM Group's net income decreased by 36.5%, to Ps. 590.6
  million in 2001 from Ps. 930.3 million in 2000. In the Costco Mexico Group net
  income decreased by 14.8%, to Ps. 290.2 million in 2001, from Ps.340.7 million
  in 2000. In the Other Group, net income decreased 53.1% from Ps. 50.1 million
  in 2000 to Ps. 23.5 million in 2001.

Comparison of fiscal years ended December 31, 2000 and December 31, 1999.

At the end of 2000, we had 167 stores and 46 restaurants in operation, while
  at the end of 1999 there were 158 stores and 39 restaurants.

In 2000, we opened two Mega hypermarkets, seven Comercial Mexicana stores,
  two Bodega Comercial Mexicana discount stores, two Costco membership warehouses
  clubs and 8 Restaurantes California. In addition, three Comercial Mexicana stores,
  two Mega hypermarkets, one Costco membership warehouse club, two Sumesa supermarkets,
  one Bodega Comercial Mexicana discount store and one Restaurante California
  were remodeled. One Comercial Mexicana store was converted into a Mega hypermarket
  and another two into a Bodega discount stores. The retail selling area increased
  by approximately 7.8% to 11,552,165 square feet in 2000 from 10,713,159 square
  feet in 1999.

Net Sales. Net sales increased 6.8% to Ps.33,001.8 million in
  2000, from Ps.30,898.1 million in 1999. The growth in net sales was a result
  of a 2.6% increase in same store sales, as well as a 4.2% increase in net sales
  from stores opened during 2000. Divided by segment, the CCM Group had a 3.9%
  net sales increase and the Costco Mexico Group had a 25.7% increase in net sales
  and the Others Group had a 11.2% increase in net sales.

We attribute the slow growth in the CCM Group to a stronger competitive environment,
  in addition to the fact that price increases in perishables during 2000 were
  lower than the National Consumer Price Index. This slow growth is also a result
  of conservative consumers' behavior during the second half of 2000. Conversely,
  the Costco Mexico Group growth is primarily due to the strengthening of the
  peso against the dollar that has promoted an increase in consumption of durable
  goods and big ticket items, such as electronics, appliances and furniture, and
  to the opening of two new Costco membership warehouses in 2000. We believe the
  Others Group's strong performance was due to improved customer service amenities,
  including a salad bar and buffet.

We also continued promoting in the CCM Group the lay-away system under which
  customers can purchase general merchandise by paying installments at agreed-upon
  intervals. During 1999, a special program was implemented with Comercial Mexicana
  credit card holders, in which the holders are invited to take advantage of special
  bargains offered specifically for them. However, the number of credit cards
  was reduced by 6.2%, to 384,526 holders in 2000, from 410,157 holders in 1999.
  Comercial Mexicana credit card sales represented 3.0% of the total sales in
  2000, compared to 3.8% in 1999. This decrease resulted primarily from the decline
  in both consumer spending and Mexico's general economic activity during the
  second half of 2000. During 2000, we continued to boost general merchandise
  sales in the CCM Group through our promotional campaigns, despite the fact that,
  during 2000, consumer credit continued to be restricted by high interest rates.
  We currently do not intend to promote additional credit programs in the Costco
  Mexico Group or the Other Group.

Sales per square foot increased by 0.8%, to Ps.3,219.0 million in 2000, from
  Ps.3,193.7 million in 1999, principally reflecting Costco Mexico Group's and
  the Other Group's sales growth described above.

Cost of Sales. Cost of sales increased by 7.0%, to Ps.26,695.3
  million in 2000, from Ps.24,957.5 million in 1999. Our gross profit as a percentage
  of net sales was 19.1% in 2000, compared to 19.2% in 1999. The decrease in this
  concept mainly reflects the increase on participation of the Costco Joint Venture
  and Others Group in the total sales of the group. Costco Mexico Group's gross
  margin is lower than the gross margin of the CCM Group, as a result of bulk
  sales at the Costco membership warehouses. The Other Group's margins are higher
  than those of the CCM Group and the Costco Mexico Group, but this Group accounts
  for a very small portion of the Company's overall gross profits.

Operating Expenses. Total operating costs increased by 8.4%,
  to Ps.5,149.6 million in 2000, from Ps.4,749.6 million in 1999. Operating costs
  as a percentage of net sales showed an increase of 15.6% in 2000 compared to
  15.4% in 1999.Net sales per operating employee decreased by 3.1%, to Ps.1.20
  million per operating employee in 2000, from Ps.1.24 million per operating employee
  in 1999.

Selling expenses (net of depreciation and amortization) increased by 10.1%,
  to Ps.3,723.4 million in 2000, from Ps.3,381.5 million in 1999, representing
  11.0% of net sales in 2000 and in 1999. Selling expenses include salaries, advertising,
  and rents. The increase in this category was mainly due to the increase in salaries
  paid to employees of new stores and rents paid to third parties.

Administrative expenses (net of depreciation and amortization) decreased by
  1.6%, to Ps.783.7 million in 2000, from Ps.796.5 million in 1999, representing
  2.4% of net sales in 2000 and 2.6% of net sales in 1999. Administrative expenses
  decreased mainly as a result of reductions in equipment leases, and maintenance
  expenses, among other items.

Depreciation and amortization increased by 12.5%, to Ps.642.4 million in 2000,
  from Ps.571.3 million in 1999, representing 2.0% of net sales in 2000 and 1.9%
  of net sales in 1999. The increase was a result of the new openings of stores.
  Depreciation and amortization in the CCM Group increased by 12.9%, to Ps.564.4
  million in 2000, from Ps.499.9 million in 1999. The Costco Mexico Group increased
  by 8.8%, to Ps.128.3 million in 2000 from Ps.117.9 in 1999. This increase in
  depreciation in the Costco segment resulted primarily from the opening of 2
  units during 2000. In the Others Group, depreciation and amortization increase
  12.0% from Ps. 12.4 million in 1999 to Ps. 13.9 million in 2000. This increase
  was the result of the opening of eight new Restaurantes California.

As a result of the above, operating income decreased by 2.9%, to Ps.1,156.9
  million in 2000, from Ps.1,191.0 million in 1999, representing 3.5% and 3.9%
  of net sales in 2000 and 1999, respectively.

Integral Results of Financing. Interest expense decreased by
  6.0%, to Ps.245.7 million in 2000, from Ps.261.5 million in 1999. In 2000 interest
  expense included interest on the U.S.$100.0 million principal amount of the
  9.375% Senior Notes due 2005, or the Senior Notes, the 130 million UDI's direct
  loan due 2002 and a direct bank loan of U.S.$33 million due 2000. Interest expense
  decreased, primarily as a result of the reduction of our total debt during 2000.
  The weighted average effective interest rate on our debt was 9.0% for each of
  2000 and 1999 (including, in each case, additional amounts currently payable
  in respect of certain Mexican withholding taxes). See Notes 2, 3 and 8 to the
  Financial Statements.

Interest income decreased by 36.8%, to Ps.55.2 million in 2000, from Ps.87.8
  million in 1999. Such change was due mainly to the decrease in nominal interest
  rates and the decrease in average invested cash during 2000 compared to 1999.

During 2000 and 1999 we repurchased and canceled Senior Notes with a face value
  of U.S.$1.5 million and U.S.$2.5 million, respectively, at an average discount
  of approximately 2.0% and 7.5%, respectively, generating a gain of Ps.0.3 million
  and Ps.1.0 million in 2000 and 1999, respectively. See Note 8 to the Financial
  Statements.

During 2000 the devaluation of the Peso compared to the dollar generated foreign
  exchange loss of Ps.54.4 million, compared to a Ps.94.3 million gain in 1999,
  due mainly to a 1.6% devaluation of the peso against the dollar during 2000,
  compared to a 4.1 % appreciation during 1999.

Gain from monetary position decreased to Ps.474.0 million in 2000 compared
  to Ps.639.4 million in 1999. This decrease was mainly due to an inflation rate
  of 8.9% during 2000, compared to 12.3% rate recorded during 1999.

As a result of the above, integral results of financing decreased to Ps.229.2
  million in 2000 compared to an income of Ps.560.0 million in 1999.

Other (Expense). Other expenses decreased by 4.7%, to Ps.149.4
  million in 2000, from Ps.156.8 million in 1999. This decrease in 2000 was due
  to the reduction in fixed assets write-offs. In 1999, other expenses included
  write-offs of computer and store equipment which were not Y2K compliant, as
  well as other fixed assets, expenses associated with store remodeling, and other
  miscellaneous expenses which were partially offset by income related to tax
  refunds and value added tax and other income generated by an adjustment to restate
  the value of the Company's investment in Banacci, as well as the sales of fixed
  assets and other miscellaneous income items.

Taxes and Employees' Profit Sharing. In 2000, we paid Ps.125.5
  million in asset tax and Ps.10.8 million in income taxes in connection with
  income generated by certain subsidiaries that are not consolidated for fiscal
  purposes. In 1999, we paid Ps.144.4 million in asset tax and Ps.7.2 million
  in income tax in connection with income generated by certain subsidiaries that
  are not consolidated for fiscal purposes.

In May 1999, the Mexican Institute of Public Accountants, or MIPA, issued
  a revised Bulletin D-4, "Accounting for Income Tax, Assets Tax and Employees'
  Profit Sharing." Effective in January 1, 2000, we adopted the provisions of
  the revised bulletin D-4. We switched from the partial liability method to the
  comprehensive assets and liabilities method, which consists of calculating deferred
  income tax by applying the respective income tax rate to temporary differences
  between the accounting and tax values of assets and liabilities at the financial
  statement date. As a result of the adoption of this new D-4, we recognized credit
  to income in the amount of Ps.130.6 million.

Net Income. As a result of the above, net income decreased by
  19.4%, to Ps.1,150.8 million in 2000, from Ps.1,428.4 million in 1999. Net income
  as a percentage of net sales was 3.5% for 2000, as compared to 4.6% for 1999.
  For the CCM Group, net profit decreased by 26.9%, to Ps.930.3 million in 2000,
  from Ps.1,273.3 million in 1999. This decrease in net profit primarily was result
  of an increase in expenses, mostly in salaries paid to employees of new stores,
  depreciation and rents paid to third parties. In the Costco Mexico Group, net
  income increased by 60.4%, to Ps. 340.7 million in 2000, from Ps.212.4 million
  in 1999. This increase in net income was a result of better cost control during
  2000 compared to 1999 and to a better absorption of operating expenses due to
  the significant sales growth of the Costco Joint Venture. In the Others Group,
  net income increase 2.5%, to Ps. 50.1 million in 2000 from Ps. 48.9 million
  in 1999. This increase mainly reflects in reduction in headcount and increased
  sales.

Liquidity and Capital Resources.

Liquidity.

In the past the Company's liquidity has generally been provided by the cash
  generated from operations and occasionally by short-term loans that are generally
  paid before the year-end. In order to finance its growth, the Company has obtained
  funds through issuances of debt and capital. Interest expense in 2001, 2000
  and 1999 was Ps.158.1 million, Ps.177.2 million and Ps.203.3 million, respectively.

The following table sets forth a description of our outstanding indebtedness
  as of December 31, 2001:

|                                                                                                                                                                | 2001         | 2000        
|--------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------ | ------------
|U.S.$ 100 million Senior Notes, at a fixed interest rate of
      9.375% payable semi-annually due 2005. (1)                                                    | Ps 916,000   | Ps 1,007,460
|U.S.$20 million forward agreement maturing in 2005 (2)                                                                                                          | 30,830       | -           
|Direct loan of U.S.$30 million, maturing semi-annually from
      June 2003 to December 2004, at a fixed interest rate LIBOR + 1.75 payable
      semi-annually | 274,800      | -           
|Forward agreement of U.S.$30 million maturing in 2002 (3)                                                                                                       | 8,897        | -           
|172.9 million UDI debentures, due 2010, at a fixed interest
      rate of 8%, payable semi-annually.(4)                                                         | 528,257      | 525,125     
|Direct loan of 90 million UDI's at a fixed interest are of
      9.10%, due 2002.(5)                                                                            | -            | 273,344     
|                                                                                                                                                                | 1,758,784    | 1,805,929   
|Less:                                                                                                                                                           |              |             
|Short-term forward contract                                                                                                                                     | 8,897        | -           
|Total long-term debt                                                                                                                                            | Ps 1,749,887 | Ps 1,805,929

(1) In April 1998, the Company issued U.S.$130 million Series B unregistered
  bonds at a fixed interest rate of 9.375% . Interest on these bonds is payable
  semi-annually in April and October of every year beginning October 1998. Beginning
  April 2003, the Company has the option to repurchase these bonds, partially
  or fully, at 104.5% of their nominal value, and 102.25% twelve months after
  that date. The agreement for this bond has certain covenants that, among other
  things, limit the ability of the Company and its Restricted Subsidiaries (as
  defined) to: (i) incur additional indebtedness; (ii) make certain restricted
  payments (iii) allow restrictions on distributions from Restricted Subsidiaries;
  (iv) incur liens; (v) enter into certain transactions with affiliates; (vi)
  sell, assign, transfer, lease, convey or otherwise dispose of all or substantially
  all of the assets of the Company; (vii) enter into sale and leaseback transactions;
  (viii) issue capital stock of its Restricted Subsidiaries; and (ix) merge or
  consolidate with any other entity. Additionally the Company will be required
  to make an offer to purchase the Notes at a price equal to 100% of the principal
  amount thereof, plus accrued and unpaid interest to the date of the purchase
  with the proceeds of certain asset sales. During 2000 and 1999, the Company
  repurchased U.S.$ 1.5, and U.S.$ 2.5 million Notes (fair value), which were
  cancelled in 2000 and 1999, respectively. 
  (2) On February 28, 2001 we renegotiated the forward agreement for the purchase
  of U.S.$20 million effective from March 1, 2001 to April 14, 2005, when we will
  be obligated to pay the Mexican peso equivalent of 74,004,278 UDIs. 
  (3) In December 2001, the Company entered into a forward contract for the purchase
  of U.S.$30 million at the exchange rate of Ps. 9.85 per dollar, effective from
  December 3, 2001 to December 27, 2002, provided that the exchange rate does
  not rise above Ps. 11.25 per dollar during the term of the contract. If the
  exchange rate were to rise about Ps. 11.25 per dollar, our obligations under
  this contract would be terminated. 
  (4) In December 2000, the Company established an UDI-indexed, peso-denominated
  debenture program pursuant to which it could issue debentures in an aggregate
  amount of up to 500 million UDIs. Under this program, the Company issued debentures
  with a face value of 172.9 million UDIs with a fixed interest rate of 8%, payable
  semi-annually over a ten year term. The contract includes restrictive covenants
  which (i) limit our ability to (a) issue additional debt; (b) incur encumbrances;
  (c) enter into or effectuate mergers, spin-offs or sale of assets; and (d) pay
  dividends; and (ii) require that we maintain a certain degree of priority (guarantee).
  
  (5) The Company settled this loan in March 2001. In October 1999, a debt in
  dollars was refinanced with a direct loan of UDIs at an 11.6% fixed annual interest
  rate, payable monthly. In December 2000, the Company made a partial payment
  in the amount of 40 million Investment Units (UDI's) and restructured the remaining
  debt by reducing the interest rate to 9.10% and in March 2001. The Company settled
  the loan in advance.

During 2001, 2000 and 1999, the Company paid Ps.158,113, Ps.177,264 and Ps.203,335,
  respectively, of interest on debt. In the event the Company is unable to secure
  financing on similar terms in the future, it may be required to pay higher interest
  rates. Severe devaluation of the Mexican peso may have a material adverse effect on
  the Company's result. We cannot predict that effect, however, this may affect the
  ability of the Company to meet it is debt and interest payments and our ability to
  obtain imported goods.

As of December 31, 2001, 2000 and 1999 the Company was in compliance with all
  its payments and its debt covenants.

The management of our trade payables and inventory is also an important source
  of financing. In 2000 and 2001 the excess of the average length of days payable
  for our trade payables exceed the average number of days inventory decreased
  from 9 in 2000 to 5 in 2001.

At December 31, 2001 and 2000, we had an aggregate of over Ps.4,427 million
  and Ps.2,964 million respectively of credit available through unused uncommitted
  lines of credit with nine banking institutions in 2001 and eleven in 2000, under
  which we may borrow in pesos or, at our option, in U.S. dollars (converted into
  pesos at the exchange rate in effect at the time of the borrowing). The terms
  and conditions of such lines of credit will be determined at the time when they
  are utilized. We renew our bank lines of credit on a yearly basis, and these
  credit lines do not contain any financial covenants.

Resources from operation activities amounted to Ps.731.5 million in 2001 and
  Ps.1,755.9 million in 2000. Inventories decreased 5.1% to Ps.3,867.5 million
  at December 31, 2001 from Ps.4,073.0 million at December 31, 2000. Inventory
  remained in our warehouse an average of 52 days in 2001 and 48 days in 2000.
  The average number of days payable for our trade payables decreased to 56 days
  in 2001 from 57 days in 2000.

Assets Investments

The following tables sets forth our Assets Investments for each of the three
  years ended December 31, 2001 and the budgeted investments for 2002.

|Year ended December 31(1),                                                                                      
|----------------------------------------------------------------------------------------------------------------
|                                                                                                                
|(millions of constant Pesos as of December 31, 2001,
        except for 2002 amounts which are in nominal Pesos)
|Real estate                                                                                                     
|Store fixtures(3)                                                                                               
|Information systems                                                                                             
|Total                                                                                                           

(1) Capital expenditures exclude Ps.263.2 in 1999, Ps.227.0 in 2000 and Ps.261.1
  in 2001 contributed by the Costco membership warehouses to the Costco Mexico
  joint venture. 
  (2) Represents budgeted amounts for the year ending December 31, 2002. 
  (3) Represents store fixtures and other equipment expenditures.

Assets investments for $1,140.6 million in 2001 were financed with resources
  obtained from operations. The plans of the Company for 2002 are contingent due
  to the economic situation of the country and to the Company's potential to generate
  enough cash flow to finance such investments.

We currently plan to finance our assets investments for 2002 mainly from cash
  flow from operations. Although we expect that enough financing will be available,
  we cannot assure you that there will be adequate cash flow from operations in
  order to accomplish the investments planned. We are also responsible for financing
  50% of the new Costco warehouses.

We currently plan to invest U.S.$135 million
  in new projects during next year. We expect to open 17 units as follows: one
  Comercial Mexicana, two Bodegas, two Megas, one Sumesa, three Costco membership
  warehouses and eight Restaurantes California. We intend to continue remodeling
  units and intend to start construction on our new state-of-the-art distribution
  center. We expect that this new distribution center will require an investment
  of between U.S. $40 and $45 million over the next nine months. Resources used
  for this expansion program will be obtained exclusively from the cash flow.
  See "Business Description -Description of Principal Assets".

New Mexican and U.S. Accounting Standards

In December 2001, the MIPA issued Bulletin C-9, "Liability, Provisions, Contingent
  Assets and Liabilities, and Commitments." Bulletin C-9 provides guidance for
  the valuation, presentation and disclosure of liabilities and provisions (other
  than income taxes, employee benefit plans, financial instruments to be valued
  on a fair value basis and asset allowances), including contingent assets and
  liabilities, as well as disclosure guidelines for commitments incurred by an
  entity as a part of its operations. Bulletin C-9 will be effective for fiscal
  years beginning after January 1, 2003 with earlier adoption allowed.

In January 2002, the MIPA issued Bulletin C-8, "Intangible Assets," which defines
  intangible assets as costs incurred and rights or privileges acquired that will
  generate a future economic benefit. Bulletin C-8 provides a definition of research
  and development costs requiring that only development costs can be deferred
  to future periods. Furthermore, Bulletin C-8 states that preoperating costs
  should be expensed as a period cost, unless they can be classified as development
  costs. Bulletin C-8 requires that intangible assets with indefinite useful lives
  should not be amortized, but should be tested for impairment annually. Intangible
  assets with finite useful lives should be amortized over their useful lives.
  The provisions of Bulletin C-8 are effective for fiscal years beginning after
  January 1, 2003, although early adoption is recommended.

In June 2001, the FASB issued SFAS No. 141, "Business Combinations" ("SFAS
  141"). SFAS 141 supersedes APB opinion No. 16, "Business Combinations" and amends
  or supersedes a number of related interpretations of APB 16. SFAS 141 eliminates
  the pooling-of-interests method of accounting for business combinations, and
  changes the criteria to recognize intangible assets apart from goodwill. SFAS
  141 is required to be adopted for all business combinations initiated after
  June 30, 2001. Management has assessed the impact of the adoption of SFAS 141
  on its consolidated financial statements and believes the impact will not be
  material.

Also in June 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible
  Assets" ("SFAS 142"). SFAS 142 supersedes APB opinion No. 17, "Intangible Assets".
  Under SFAS 142, goodwill and indefinite lived intangible assets are no longer
  amortized but are reviewed annually, or more frequently if impairment indicators
  arise, for impairment. SFAS 142 is required to be applied at the beginning of
  an entity's fiscal year and to be applied to all goodwill and other intangible
  assets recognized in its financial statements at that date. Management is currently
  evaluating the impact that adoption of SFAS 142 will have on its consolidated
  financial statements.

In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment
  or Disposal of Long-Lived Assets" ("SFAS 144"). SFAS 144 addresses financial
  accounting and reporting for the impairment or disposal of long-lived assets.
  SFAS 144 supersedes SFAS No. 121, "Accounting for the Impairment of Long-Lived
  Assets and for Long-Lived Assets to Be Disposed Of", and the accounting and
  reporting provisions of APB Opinion No. 30, "Reporting the Results of Operations
  - Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary,
  Unusual and Infrequently Occurring Events and Transactions", for the disposal
  of a segment of a business. The provisions of SFAS 144 are effective for financial
  statements issued for fiscal years beginning after December 15, 2001, with early
  application encouraged and generally are to be applied prospectively. The Company
  does not expect the adoption of SFAS 144 to have a material impact on its financial
  condition and results of operations.

Item 6. Directors, Senior Management and Employees

Directors

Our Bylaws provide that the Board of Directors will consist of the number of
  directors elected by CCM's shareholders at the annual shareholders' meeting
  for a renewable term of one year. The Board currently consists of 13 directors,
  and may consist of a minimum of 5 and up to 20 directors, 3 of whom are independent.
  The Board is responsible for the management of our business.

Each Board member was elected on April 11, 2002 at our annual shareholders
  meeting, and are elected for a one-year term. The names and positions of the
  current members of the Board, their dates of birth, and information on their
  principal business activities outside CCM are as follows:

|Carlos González Nova
      Honorary Chairman of the Board                                   | Born: August 14, 1917
      First elected: 1957
      Principal Occupation: Honorary Chairman of the Board 
      Other directorships and business experience:
      Chairman of the Board and Member of the Executive Committee of CCM                                                                                                       
|------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Guillermo González Nova
      Chairman of the Board                                         | Born: July 2, 1933                                                                                                                                                                                                                                                                                                                            
|Jaime González Nova
      Vice Chairman of the Board                                        | Born: November 13, 1930
      First elected: 1957
      Principal Occupation: Vice Chairman of the Board 
      Other directorships and business experience:
      Member of the Executive Committee of CCM                                                                                                                                   
|Carlos González Zabalegui
      Vice Chairman of the Board and Chief Executive Officer      | Born: July 13, 1951 
      First elected: 1985 
      Principal Occupation: Vice Chairman of the Board and Chief Executive Officer
      
      Other directorships and business experience:
      Executive Vice-President and General Director of CCM                                                                                       
|Elena M. González Guerra
      Director                                                     | Born: April 7, 1954
      First elected: 1990
      Principal Occupation: Director
      Other directorships and business experience:                                                                                                                                                                                                         
|Pablo J. González Guerra
      Director                                                     | Born: January 24, 1951
      First elected: 1995
      Principal Occupation: Director of Inmobiliaria Nova, S.A. de C.V.
      Other directorships and business experience:
      Director of Operadora Vista Hermosa, S.A. de C.V.                                                                                                           
|Francisco Martínez de la Vega
      Director and Chief Financial and Administrative Officer | Born: December 21, 1956
      First elected: 1990
      Principal Occupation: Director and Chief Financial and Administrative Officer
      Other directorships and business experience:
      Member of the Executive Committee, the Board of Directors, Treasury Director
      of CCM and Director of Prestaciones Universales S.A. de C.V.
|Angel Portilla González
      Director                                                      | Born: September 25, 1943
      First elected: 1990
      Principal Occupation: Director
      Other directorships and business experience:
      Member of the Executive Committee; Corporate Planning and Development Director;
      General Director; and Purchasing Director of CCM                                                       
|Javier Cantz Charles
      Director                                                         | Born: December 13, 1940
      First elected: Former General
      Director of Comercial MexicanaPrincipal Occupation: Director 
      Other directorships and business experience:
      Former General Director of Sorimex                                                                                                                   
|Santiago García García
      Director                                                       | Born: November 26, 1953
      First elected: 2002
      Principal Occupation: General Director of Comercial Mexicana
      Other directorships and business experience:
      Chief Operating Officer of Palacio de Hierro; Member of the Executive Committee
      of CCM                                                                    
|Fermín Sobero San Martin
      Director                                                     | Born: February 18, 1938
      First elected: 2002                                                                                                                                                                                                                                                                                             
|José Luis Rico Maciel
      Director and Secretary                                          | Born: September 19, 1926
      First elected: 1957
      Principal Occupation: Director 
      Other directorships and business experience:
      Member of the Executive Committee, Corporate Legal Affairs Director and
      Corporate Taxes Director of CCM                                                                               
|Rodolfo García Gómez de Parada 
      Director and Secretary Pro Term                       | Born: May 9, 1953
      First elected: 1943
      Principal Occupation: Director and Secretary Pro Term 
      Other directorships and business experience:
      Member of the Executive Committee, Corporate Tax Matters Director of CCM,
      Director of Industrias CH S.A. de C.V. and Director of Grupo Simec S.A.
      de C.V.       

Except for Carlos González Nova each Member has an alternate. The alternates
  are: Gustavo González Fernandez, Luis Felipe González Solana, Jaime González
  Solana, Luis Jose Guichard González, Antonino B. González Guerra, Luis Felipe
  González Zabalegui, Alejandro González Zabalegui, Ignacio Parada Diaz, Miguel
  Garatea Lerga and Humberto Melendez Martinez, Our independent directors are
  Fermin Sobero San Martin, Pablo J. González Guerra and Elena M. González Guerra.

Carlos González Nova, Jaime González Nova and Guillermo González Nova are brothers.
  Carlos González Zabalegui is the son of Carlos González Nova and the nephew
  of Jaime González Nova and Guillermo González Nova. Elena M. González Guerra
  and Pablo J. González Guerra are the niece and nephew, respectively, of Carlos
  González Nova, Jaime González Nova and Guillermo González Nova.

On June 1, 2001 the Mexican Securities Market Law, or the Mexican Securities
  Law, was amended. We amended our bylaws on April 11, 2002 to reflect the changes
  in the Mexican Securities Law. Pursuant to the amendments to the Mexican Securities
  Law, our bylaws now provide that the Board of Directors must be composed of
  at least five and no more than twenty members. At least 25% of the members of
  the Board of Directors must qualify as Independent Directors. The Mexican Securities
  Law provides that the following persons, among others, do not qualify as independent:

* employees or managers of the issuer; 
  * controlling shareholders of the issuer; and 
  * important clients, suppliers, debtors or creditors of the issuer or their
  employees or officers.

As a result of amendments to the Mexican Securities Law, our bylaws also provide
  that a specific alternate director must be appointed for each director. The
  Chairman of the Board of Directors shall have a casting vote. The Board of Directors
  shall also meet at least on a quarterly basis. The Chairman, 25% of the Board
  Members or any statutory auditor may call for a Board meeting. The Board of
  Directors must approve all transactions that are to be entered into between
  us and any of our shareholders, our managers or other related individuals that
  deviate from our ordinary course of business. Likewise, the Board of Directors
  must approve any purchase or sale that represents 10% or more of our assets,
  the grant by us of guarantees exceeding 30% of our assets and any other transactions
  representing more than 1% of our assets, in addition to any other shareholder
  approvals required by our Bylaws or otherwise.

In addition, our bylaws, as amended pursuant to the Mexican Securities Law,
  provide that each holder or group of holders representing at least 10% of a
  series of shares has the right to appoint one director and its corresponding
  alternate director. Ten percent holders of limited voting stock are also entitled
  to nominate a director and its corresponding alternate director.

Executive Officers

The names and positions of our current executive officers, their dates of birth,
  and information concerning their prior business experience are as follows:

|Carlos González Zabalegui
      Chief Executive Officer                          | Born: July 13, 1951
      Appointed: 1978
      Business experience: Chief Executive Officer General Director                                                        
|-------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Santiago García García
      General Director of Comercial Mexicana              | Born: November 26, 1953
      Appointed: 2002
      Business experience: Chief Operating Officer of Palacio de Hierro; Member
      of the Executive Committee of CCM
|Javier Cantú Charles
      General Director of Comercial Mexicana                | Born: December 13, 1940
      Appointed: 2002
      Business experience: General Director of CCM; General Director of Sorimex                                        
|Luis Felipe González Solana
      General Director of Restaurantes California    | Born: December 5, 1958
      Appointed: 1986
      Business experience: General Director of Restaurantes California                                                  
|Jaime González Solana
      General Director of Costco                           | Born: February 26, 1957
      Appointed: 1991
      Business experience: General Director of Costco                                                                  
|José Luis Rico Maciel
      Corporate Legal Affairs and Corporate Taxes Director | Born: September 19, 1926
      Appointed: 1957
      Business experience: Corporate Legal Affairs and Corporate Taxes Director                                       
|Francisco Martínez de la Vega
      Chief Financial and Administrative Officer   | Born: December 21, 1956
      Appointed: 1991
      Business experience: Chief Financial and Administrative Officer                                                  
|Angel Portilla González 
      Corporate Planning and Development Director       | Born: September 25, 1943
      Appointed: 1984
      Business experience: Corporate Planning and Development Director                                                
|Rodolfo García Gómez de Parada
      Corporate Tax Matters Director              | Born: May 9, 1952
      Appointed: 1986
      Business experience: Corporate Tax Matters Director                                                                    

Statutory Auditors

Our statutory auditors are Rogerio Casas Alatriste Hernandez and Manuel Garcia
  Braña. Under our bylaws, the holders of a majority of the outstanding B Shares
  voting together may elect one or more statutory auditors (comisarios) and corresponding
  alternate statutory auditors. In accordance with the amendments to the Securities
  Market Law, every 10% holder, or group of holders, of a series of our shares
  may elect a statutory auditor (comisario) and a corresponding alternate statutory
  auditor at the annual ordinary shareholders' meeting. The primary role of the
  statutory auditors is to report to our shareholders at the annual ordinary general
  meeting regarding the accuracy of the financial information presented to such
  holders by the Board of Directors. Mexican law requires that the statutory auditors
  receive monthly reports from the Board of Directors regarding material aspects
  of our affairs, including our financial condition, and that they be invited
  to attend any meeting of the Board of Directors and the Audit Committee. The
  statutory auditors are also authorized to:

* call ordinary or extraordinary general meetings, 
  * place items on the agenda for meetings of shareholders or the Board of Directors,
  
  * attend meetings of shareholders, the Board of Directors, or the Audit Committee,
  and 
  * generally monitor our affairs.

The statutory auditors also receive monthly reports from the Board of Directors
  regarding material aspects of our affairs, including our financial condition.

C.P. Rogerio Casas Alatriste H., a retired partner of PricewaterhouseCoopers,
  was elected by our shareholders at the annual general ordinary shareholders'
  meeting in 2002 to serve as our statutory auditor, and C.P. Manuel Garcia
  Braña was elected to serve as Mr. Casas' alternate, in each case for a
  renewable term of one year.

Compensation

For the year ended December 31, 2001, the aggregate compensation we paid to
  our directors and executive officers for services in all capacities, excluding
  any benefits under our stock purchase plan described below, was approximately
  Ps.54.1 million.

Options to Purchase Securities From Registrant or Subsidiaries

Under our stock purchase plan, certain key employees are granted the rights
  to purchase our BC units at no less than the fair market value of these units
  on the date the options are granted. The rights vest equally over a five-year
  term, and expire in 2006. Employees selected to participate in the stock purchase
  plan have the right to receive the fair value appreciation of their allocated
  units in lieu of exercising their purchase privileges on the planned anniversary
  dates. During 2001, we granted 6,305,087 rights ranging from Ps.7.15 to Ps.8.69.
  During 2000, 4,558,785 rights ranging from Ps.9.00 to Ps.8.00. During 1999,
  we granted 3,678,820 rights ranging from Ps.8.98 to Ps.11.98 During 1998, 2,987,061
  rights at Ps.5.00. See Note 13 to the Financial Statements.

At December 31, 2000, and 1999, 1,095,164 and 742,376 BC units, respectively,
  were available for granting to employees. These units were repurchased by us
  and placed in a trust. At December 31, 2001, no units were available for granting
  to employees.

Board Practices

In accordance with the Mexican Securities Market Law and our bylaws, we established
  an Audit Committee consisting of the following members of our Board: Fermin
  Sobero San Martin, who is the Chairman of this Committee, and Pablo J. González
  Guerra and Javier Cantu Charles who are examiners. Both the Chairman and a majority
  of the members of the Audit Committee must be, and are, independent directors.
  Our statutory auditors must be invited to attend all Audit Committee meetings.
  Among other duties and responsibilities, the Audit Committee must:

* prepare an annual report regarding its activities for submission to the Board
  and to our shareholders at our annual shareholders' meeting; 
  * prepare and render statements to the Board as to the fairness of transactions
  and arrangements with related parties, which must be approved by our Board of
  Directors; and 
  * retain independent experts to render fairness opinions in connection with
  extraordinary corporate transactions and arrangements with related parties.

Employees and Labor Relations

At December 31, 2001, we employed 31,955 individuals. During the busiest retail
  months, part-time employees may constitute up to 10% of our workforce. At December
  31, 2001, we had 4,804 administrative and managerial and 27,151 other employees.

We seek to employ store assistants who meet criteria established by us for
  particular positions. Frequently, however, depending upon conditions prevailing
  in regional job markets, we are not able to adhere strictly to these criteria.
  Although we believe that our turnover of store assistants does not exceed the
  industry average, it nevertheless remains high. We are seeking to reduce turnover
  by paying higher compensation and providing opportunities for advancement within
  the Company.

Our store managerial staff is comprised mostly of employees with long tenure
  with us who have worked their way up to a managerial position, as well as employees
  with a higher education who have completed a three-month training program which
  includes some practical experience in our stores. In many cases, our store managerial
  staff receives further training from a leading Mexican university under a program
  exclusively available to our employees.

Our senior managerial and administrative employees have semi-annual performance
  assessments and receive performance-related compensation, including participation
  in our stock purchase plan. Our management believes that compensation must attract,
  retain and motivate the best employees available and, therefore, we are willing
  to compensate employees at levels which management believes are generally higher
  than those prevailing in the Mexican retail industry.

We are committed to training employees. During 2001 we dedicated approximately
  5.9 days of training per employee. All new employees are provided with training
  designed to ensure compliance with our policies relating to customer service,
  prevention of theft and operational procedures. Continuing on-the-job training
  is provided to our employees, including upon each transfer or promotion of an
  employee.

Approximately 15.0% of our employees were members of one of 11 labor unions
  at December 31, 2001. In addition, labor relations in some stores are governed
  by separate collective bargaining agreements executed between employees of a
  single store and a union selected by such employees. The economic terms of the
  collective bargaining are renegotiated on an annual basis. We have not experienced
  any work stoppages and management believes that we have a good relationship
  with our employees and unions.

The following table sets forth the number of employees and a breakdown of employees
  by main category of activity and geographic location as of the end of each year
  in the three-year period ended December 31, 2001:

|December 31,           
|-----------------------
|                       
|Number of Employees    
|Category of Activity   
|Operating Employee     
|Administrative employee
|Geographic Location    
|Metropolitan           
|Central                
|Northwest              
|Northeast              
|Southwest              
|Southeast              

Share Ownership of Directors and Officers

Share Ownership of Directors and Officers Share ownership of our directors,
  alternate directors and executive officers is set forth in the table under "Major
  Shareholders and Related Party Transactions". Except as set forth in this table,
  none of our directors, alternate directors or executive officers is the beneficial
  owner of more than 1% of any class of our capital stock or conditional sale
  agreements or options representing the right to purchase more than 1% of any
  class of our capital stock.

None of our other directors, alternate directors or executive officers is the
  beneficial owner of more than 1% of any class of our capital stock.

Item 7. Major Shareholders and Related Party Transactions

Capital Stock

Our common stock consists of 4,005,711,639 B Shares and 338,288,361 C Shares.
  B Shares, without par value, provide each holder one vote per share, and C Shares,
  without par value, do not have voting rights. We also have 164,000,000 Units
  held in treasury.

Each B Unit may at any time be converted into a Unit, by either the Secretary
  of the Company or by Indeval, S.A. de C.V. Our capital structure as of December
  31 of the last three years was as follows:

|Year ended December 31,
|-----------------------
|                       
|1999                   
|2000                   
|2001                   

At December 31, 2001, the Principal Shareholders owned 722,592,760 B Units
  and 22,704,334 Units representing in the aggregate 68.63% of the total outstanding
  capital stock. The Principal Shareholders determine the outcome of substantially
  all actions requiring shareholder approval, and through their control of the
  Board of Directors, select executive officers.

Major Shareholders

The following table sets forth certain information with respect to ownership
  of CCM's capital stock as of December 31, 2001 of (i) each person who is known
  by CCM to own more than 5% or each executive officer or director who is known
  by CCM to own more than 1% of either the currently outstanding B Units (consisting
  of four B Shares, without par value and with one vote per share, or B Shares,
  which trade together as a single security) and Units (consisting of three B
  Shares and one C Share, without par value and without voting rights, or C Shares,
  which trade together as a single security) and (ii) all our executive officers
  and directors as a group.

|B Units and Units Owned as of December 31,
      2001                    
|-------------------------------------------------------------------------
|                                                                         
|Identity of Owner                                                        
|Scotiabank Trust(2)                                                      
|All executive officers and directors as a group (20 persons)
      (3)(4)

(1) Total outstanding B Units and Units includes treasury stock (1,314,200
  B Units and 18,455,000 of Units as of December 31, 2000). 
  (2) For a description of this trust and its beneficiaries which indirectly include
  our Principal Shareholders, see " - Our Principal Shareholders." 
  (3) Includes 3,218,338 Units that are subject to our stock option  plan that
  certain officers and directors have the right to purchase pursuant to grants
  received prior to December 31, 2000. 
  (4) Including the Principal Shareholders.

As of December 31, 2001, the public float for the Units (including those represented
  by GDSs) represented approximately 30.5% of the total outstanding capital stock
  of CCM.

The Principal Shareholders are able to exercise full voting rights with respect
  to the B Shares that they hold (including B Shares held through B Units representing
  a majority of the outstanding B shares (the "Control Position") as well as any
  B Shares held through Units) and may convert each B Unit into one Unit at any
  time. The Principal Shareholders have informed us that they currently intend
  to maintain their Control Position and, through this position, will have the
  power to elect a majority of our directors and determine the outcome of substantially
  all actions requiring shareholder approval. See "Item 3. Key Information-Factors
  Relating to the Company-Control by the Principal Shareholders."

Our Principal Shareholders. Approximately 68% of our B Units
  are held by the Scotiabank Inverlat Trust, or the Scotiabank Trust. The largest
  direct beneficiary of this trust is a company owned by members of the González
  family. Members of this family, including Carlos González Nova, Guillermo González
  Nova, and Jaime González Nova, own an equity interest in such company which
  is substantially equivalent to their relative percentage ownership interest
  in B Units as reported in our Annual Report on Form 20-F for the year ended
  December 31, 2000. The other beneficiaries of this trust 50 of our employees
  whose percentage interest in the Trust is less than 1% percent.

Under the terms of the Scotiabank Trust, the company which contributed the
  B Units into the Trust, and which is controlled by our Principal Shareholders,
  may at any time transfer its interest in the Trust to members of the González
  family or a third party. The Principal Shareholders, as indirect beneficiaries,
  may from time to time contribute additional B Units, Units, and any other Shares
  of our capital stock that they may receive in the future, into the Scotiabank
  Trust.

The Executive Committee. Decisions regarding the Trust are made by a
  majority vote of a four member Executive Committee. The members of the Executive
  Committee are Carlos González Nova, Carlos González Zabalegui, Guillermo González
  Nova and Jaime González Nova. Each member of the Executive Committee has one
  vote. In the event of a tie, the vote of the President of the Executive Committee,
  Carlos González Nova, will be deemed the deciding vote. The Executive Committee
  has the exclusive authority to make decisions regarding voting and disposition
  of the B Units held by the Scotiabank Trust. In the event a member of the Executive
  Committee resigns or dies, that member's alternate will become full member.
  A new alternate will be selected by the new member, subject to Executive Committee
  approval.

Related Party Transactions

We do not grant personal loans to our employees or shareholders. Employees
  and our shareholders are permitted to borrow only against our retirement fund
  or from our annual savings fund.

We currently lease one store located in Puebla from a company controlled by
  the Principal Shareholders and certain members of the Principal Shareholders'
  families. We believe that this lease, which expires in 2015, is on terms no
  less favorable to us than would be obtainable in an arm's-length transaction.

From time to time, in the regular course of business, we deal with Nova Distex,
  S.A. de C.V., or Nova. Our majority shareholders own a controlling interest
  in Nova, a textile manufacturer and property management company. We provide
  management services to Nova and purchase textiles for resale in our stores.
  We believe that these transactions are on terms no less favorable to us than
  would be obtainable in an arm's length transaction.

We entered into a Registration Rights Agreement with our principal shareholders.
  We have agreed to cooperate with the Principal Shareholders in effecting any
  future secondary stock offering by them, to take, at our expense, any actions,
  including registration of such offering under the securities laws of any jurisdiction,
  that the Principal Shareholders may deem necessary or desirable in connection
  therewith and to indemnify the Principal Shareholders and such other persons
  as may be necessary or desirable in connection therewith.

For additional information regarding related party transactions, see Note 6
  to our Financial Statements.

Item 8. Financial Information

See "Item 17-Financial Statements" and pages F-1 through F-6, which are incorporated
  herein by reference.

Item 9. Offer and Listing Details

Market Information

The GDSs, each of which represents 20 Units, are listed on the NYSE, and the
  NYSE symbol for the GDSs is "MCM". B Shares and the C Shares trade on the Mexican
  Stock Exchange only as Units or B Units, as the case may be. Each B Unit may
  at any time be converted into one Unit. However, Units may not be converted
  into B Units. The B Shares and the C Shares comprising the Units and the B Shares
  comprising the B Units are transferable on the books of CCM only as Units or
  B Units, as the case may be, and are not separately transferable.

We believe that as of June 19, 2002, 166,799 GDSs were held of record by two
  persons with United States addresses.

The following table shows the high and low sales prices in nominal Pesos (without
  adjustment for inflation) for the Units and the B Units on the Mexican Stock
  Exchange for the period from January 1, 1997 to June 14, 2002.

|                       | Nominal Pesos Per Unit | Nominal Pesos Per B Unit
|---------------------- | ---------------------- | ------------------------
|                       | High                   | Low                     
|1997                   | 10.60                  | 5.22                    
|1998                   | 11.00                  | 4.19                    
|1999                   | 12.90                  | 7.40                    
|2000                   |                        |                         
|First Quarter          | 12.80                  | 8.80                    
|Second Quarter         | 12.62                  | 7.02                    
|Third Quarter          | 12.00                  | 9.42                    
|Fourth Quarter         | 11.06                  | 7.62                    
|2001                   |                        |                         
|First Quarter          | 9.22                   | 6.51                    
|Second Quarter         | 8.99                   | 6.73                    
|Third Quarter          | 8.69                   | 5.50                    
|Fourth Quarter         | 7.50                   | 5.35                    
|2002                   |                        |                         
|January                | 7.10                   | 6.26                    
|February               | 6.60                   | 6.12                    
|March                  | 8.25                   | 6.33                    
|April                  | 8.40                   | 7.30                    
|May                    | 7.89                   | 7.00                    
|June (through June 14) | 7.01                   | 6.41                    

(l) Source: Mexican Stock Exchange.

The following table shows the high and low sales prices in U.S. Dollars for
  the GDSs on the New York Stock Exchange for the period from January 1, 1997
  to June 15, 2001.

|U.S. Dollars per GDSs(1)
|------------------------
|                        
|1996                    
|1997                    
|1998                    
|1999                    
|2000                    
|First Quarter           
|Second Quarter          
|Third Quarter           
|Fourth Quarter          
|December                
|2001                    
|First Quarter           
|Second Quarter          
|Third Quarter           
|Fourth Quarter          
|December                
|2002                    
|First Quarter           
|Second Quarter          
|January                 
|February                
|March                   
|April                   
|May                     
|June (through June 14)  

(1) Source: New York Stock Exchange

Debt Securities

On April 14, 1998, we issued, in a private placement, 9.375% Senior Notes
  due 2000 in an aggregate principal amount of U.S.$130 million.These notes were
  registered under the Securities Act of 1933 through an exchange offer.

These notes are neither listed for trading on any stock exchange nor approved
  for quotation through any quotation system. These notes are traded over-the-counter;
  therefore we cannot determine their high and low sales prices.

Trading on the Mexican Stock Exchange

The Mexican Stock Exchange, located in Mexico City, is the only stock exchange
  in Mexico. Operating continuously since 1907, the Mexican Stock Exchange is
  organized as a corporation with variable capital, or sociedad anonima de capital
  variable. Securities trading on the Mexican Stock Exchange occurs from 8:30
  a.m. to 3:00 p.m., Mexico City time, each business day. Since January 1999,
  all trading on the Mexican Stock Exchange has been effected electronically.
  The Mexican Stock Exchange operates a system of automatic suspension of trading
  in shares of a particular issuer as a means of controlling excessive price volatility,
  but under current trading regulations this system does not apply to the Units
  because they are traded in the form of GDSs on a stock exchange outside Mexico,
  the New York Stock Exchange.

Settlement is effected two business days after a share transaction on the Mexican
  Stock Exchange. Deferred settlement, even by mutual agreement, is not permitted
  without the approval of the CNBV. Most securities traded on the Mexican Stock
  Exchange, including the CPOs, are on deposit with S.D. Indeval, S.A. de C.V.,
  Institucion para el Deposito de Valores, S.A. de C.V., or Indeval, a privately
  owned securities depositary that acts as a clearinghouse, depositary and custodian,
  as well as a settlement, transfer and registration agent for Mexican Stock Exchange
  transactions, eliminating the need for physical transfer of securities.

Although the Mexican Securities Market Law provides for the existenceof an
  over-the-counter market, no such market for securities in Mexico currently exists.

Market Regulation and Registration Standards

In 1946, the Comision Nacional de Valores, or the National Securities Commission,
  commonly known as the CNV, was established to regulate stock market activity.
  In 1995, the CNV and the Comision Nacional Bancaria, or the National Banking
  Commission, were merged to form the CNBV. The Mexican securities market law,
  which took effect in 1975, introduced important structural changes to the Mexican
  financial system, including the organization of brokerage firms as corporations.
  The Mexican securities market law sets standards for the registration of brokerage
  firms in the intermediaries' section of the registry. Registration of brokerage
  firms, which is a prerequisite to becoming a member of the Mexican Stock Exchange,
  is granted by the Ministry of Finance upon the recommendation of the CNBV. In
  addition to setting standards for brokerage firms, the Mexican securities market
  law empowers the CNBV to regulate the public offering and trading of securities
  and to impose sanctions for the illegal use of insider information. The CNBV
  regulates the Mexican securities market, the Mexican Stock Exchange and brokerage
  firms through a board of governors composed of thirteen members, five of which
  are appointed by the Ministry of Finance.

To offer securities to the public in Mexico, an issuer must meet specific qualitative
  and quantitative requirements, and only securities for which an application
  for registration in the National Registry of Securities maintained by the CNBV
  has been approved by the CNBV may be listed on the Mexican Stock Exchange. This
  approval does not imply any kind of certification or assurance related to the
  merits or the quality of the securities or the solvency of the issuer.

In 1993, the CNBV established an intermediate securities market, which was
  also operated by the Mexican Stock Exchange, in order to permit less-liquid
  issues and issuers with lower capitalizations to participate in a public securities
  market. In essence, the general rules divided the securities section of the
  registry into two subsections, subsection A and subsection B. In addition to
  trading regularly in the auction process, registration of securities in subsection
  A enabled those securities to be eligible for transactions for which only securities
  classified as high liquidity issues by the Mexican Stock Exchange were eligible.

To be registered and maintain registration in subsection A of the registry,
  an issuer was usually required to meet more stringent qualitative and quantitative
  requirements than for subsection B. The CNBV adopted regulations that became
  effective on January 1, 2001 that eliminate subsection B and impose additional
  requirements to those currently applicable to subsection A. Accordingly, as
  of January 1, 2001, in order to be registered in subsection A, an issuer must
  or must have, among other things:

* at least three years of operating history, or if an issuer is a holding company,
  it must present three years of operating history for its principal subsidiaries;
  if the issuer is a newly created entity as a result of a merger or spin-off,
  the three year requirement must be evidenced through any of the entities involved
  in such merger or spin-off, as the case may be; 
  * shareholders' equity of at least 20 million unidades de inversion, or UDIs,
  which are inflation indexed currency units, equivalent to Ps. 58.2 million as
  of December 31, 2000; 
  * profits for the last three years of operation taken as a whole; 
  * conduct a public offering of at least 15% of the issuer's paid-in capital
  stock or, if the offering exceeds 160,000,000 UDIs, it represents at least 7%
  of the issuer's paid-in capital stock; 
  * offer at least 10,000,000 shares at a price per share of at least one UDI;
  and 
  * conduct a public offering with the potential to reach at least 200 stockholders.

To maintain its registration, an issuer must have:

* stockholders' equity of at least 15 million UDIs; 
  * at least 36 trades in its securities every six months through the Mexican
  Stock Exchange; 
  * an average price of its securities greater than Ps.1.00 during any six month
  period; 
  * at least 100 stockholders; 
  * a public float of at least 8,000,000 shares; and 
  * a public float of at least 12% of the issuer's paid-in capital stock or at
  least 5% of the issuer's paid-in capital stock if the initial public offering
  exceeded 160,000,000 UDIs.

The CNBV has the authority to waive some of these requirements in some circumstances.
  Also, some of these requirements are applicable for each series of shares of
  the relevant issuer.

As of June 1, 2001, the Ley del Mercado de Valores, or Securities Market Law,
  was amended to increase the protection given to minority shareholders and to
  bring corporate governance procedures of Mexican issuers up to international
  standards. Such amendments implemented through governmental regulations. Accordingly,
  we amended our bylaws at our annual shareholders' meeting held on April 11,
  2002, to reflect some of these amendments, including amendments that:

* established a Board with at least five and not more than twenty members
  and alternate members, of which 25% must qualify as "independent directors"
  under Mexican law; 
  * adopted specified corporate governance measures, which require us to establish,
  among other things, an audit committee, as well as more stringent procedures
  for the approval of transactions and arrangements with related parties and extraordinary
  corporate transactions; and 
  * provide additional protections for minority shareholders.

There are several requirements that have to be met by Mexican issuers in order
  to continue listed in the Mexican Stock Exchange and registered in the RNVI.
  Both the Mexican Stock Exchange and the CNBV will review issuers annually to
  verify the compliance with the foregoing requirements. Some of these requirements
  may be further reviewed by the CNBV on a quarterly basis. The Mexican Stock
  Exchange must inform the CNBV of the results of its review. If an issuer fails
  to comply with any of the foregoing requirements, the Mexican Stock Exchange
  will request that the issuer proposes a plan to cure the violation. If the issuer
  fails to propose such plan, or if its plan is not acceptable to the Mexican
  Stock Exchange, trading of its shares on the Mexican Stock Exchange will be
  temporarily suspended until the situation is corrected. In addition, if the
  issuer fails to propose the plan or ceases to follow such plan once proposed,
  the CNBV may suspend or cancel the registration of the shares. In such event,
  the issuer must evidence the mechanisms to protect the rights of public investors
  and market in general. In the event the CNBV determines to cancel the registration
  of our shares, our controlling Shareholder is obligated to conduct a tender
  offer at a price equal to the higher of (i) the average closing price of the
  last thirty trading days of our stock or (ii) the book value of such shares,
  in accordance with our latest quarterly reports filed with the CNBV before such
  tender offer is to be conducted.

Issuers of listed securities are required to file unaudited quarterly financial
  statements and audited annual financial statements as well as various periodic
  reports with the CNBV and the Mexican Stock Exchange. Recently, the internal
  regulations of the Mexican Stock Exchange were amended to implement the EMISNET,
  an automated system for the electronic transfer of the information required
  to be filed with the Mexican Stock Exchange and the CNBV. Issuers of listed
  securities must prepare and disclose their financial information by a Mexican
  Stock Exchange-approved system known as the Sistema de Informacion Financiera
  Computarizada, or Computerized Financial Information System, commonly known
  as the SIFIC. Immediately upon its receipt, the Mexican Stock Exchange makes
  that information available to the public.

Circular 11-28 of the CNBV and the internal regulations of the Mexican Stock
  Exchange require issuers of listed securities to file through the EMISNET information
  on the occurrence of material events affecting the relevant issuer. Material
  events include, but are not limited to:

* the entering into or termination of joint venture agreements or agreements
  with key suppliers; 
  * the creation of new lines of businesses or services; 
  * significant deviations in expected or projected operating performance; 
  * the restructuring or payment of significant indebtedness; 
  * material litigation or labor conflicts; 
  * changes in dividend policy; 
  * the commencement of any insolvency, suspension or bankruptcy proceedings;
  
  * changes in the directors; and 
  * any other event that may have a material adverse effect on the results, financial
  condition or operations of the relevant issuer.

If the Mexican Stock Exchange deems it necessary, it may request additional
  information regarding material events affecting the issuer.

The CNBV and the Mexican Stock Exchange may suspend the dealing in securities
  of an issuer as a result of the disclosure of material events if:

* the information filed by the issuer requires further clarifications; or 
  * the Mexican Stock Exchange determines that the public should be aware of that
  information before a trade may take place.

In these cases, trading may resume if the Mexican Stock Exchange determines
  that:

* the additional information provided by the issuer is sufficient and not misleading;
  or 
  * the public has had the opportunity to access that information.

Likewise, if the securities of an issuer are traded on both the Mexican Stock
  Exchange and a foreign securities market, that issuer must file simultaneously
  with the CNBV and the Mexican Stock Exchange a Spanish version of the information
  that it is required to file pursuant to the laws and regulations of the relevant
  jurisdiction.

Pursuant to the Securities Market Law, as amended, the CNBV must be notified
  by the shareholder of a company listed on the Mexican Stock Exchange before
  any such shareholder effects one or more simultaneous or successive transactions
  outside the Mexican Stock Exchange that result in a transfer of 10% or more
  of that company's capital stock. The holders of the shares being transferred
  must also inform the CNBV of the results of such transactions within three days
  of the completion, or otherwise, the non-completion, of the transaction. The
  CNBV will notify the Mexican Stock Exchange of these transactions, without disclosing
  the names of the parties involved. Under the amendments to the Securities Market
  Law, the CNBV may determine the cases in which the purchaser thereof shall complete
  such transactions through a tender offer, as well as the minimum and maximum
  percentages of stock of an issuer that that may be purchased through the tender
  offer.

Also, the Law states that a shareholder holding 10% or more of the capital
  stock of a company listed in the registry, is required to notify the CNBV of
  any ownership changes in shares of such company that results in a transfer of
  shares representing a beneficial ownership interest of 10% or more, within ten
  business days following the transfer transaction. The amendments to the Securities
  Market Law expressly permit Mexican issuers to include in their bylaws anti-takeover
  defenses.

Item 10. Other Information

Bylaws

Below is a brief summary of some significant provisions of our bylaws and Mexican
  law. This description does not purport to be complete, and is qualified by reference
  in its entirety to our bylaws, which have been filed as an exhibit to this annual
  report and Mexican law. For a description of the provisions of our bylaws relating
  to our Board of Directors, Executive Committee and statutory auditors, see "Directors,
  Senior Management and Employees."

Purpose

Article 2 of our bylaws defines our purpose as the promotion, organization,
  management and participation in the capital stock of all types of commercial
  companies, partnerships, associations or industrial, trading, services or any
  other type of company, both domestic and foreign, as well as participation in
  the administration thereof, as well as other purposes related thereto.

Duration

The Bylaws provide that the duration of CCM is 99 years, which term expires
  on January 28, 2043.

Registration and Transfer

Our shares are evidenced by share certificates in registered form which may
  or may not have dividend coupons attached. We maintain a stock registry, and
  in accordance with Mexican law only those holders listed in the stock registry
  are recognized as our shareholders. We will register B Shares and C Shares in
  our stock registry only as a part of Units or B Units, as the case may be. Shareholders
  may hold their Units or B Units in the form of physical certificates or through
  book-entries with institutions that have accounts with Indeval. Indeval is the
  holder of record in respect of such Units or B Units held in book-entry form.
  Accounts may be maintained at Indeval by brokers, banks and other entities approved
  by the CNBV.

Voting Rights and Shareholders' Meetings

Board of Directors. The management of our business is vested in our
  Board of Directors. Article 19 of our bylaws, amended pursuant to the June 2001
  amendments to the Mexican Securities Market Law, currently provide for a Board
  of Directors of a minimum of five and no more than twenty members, at least
  25% of which must be "independent directors" under Mexican law, and the same
  number of alternate directors. The Board currently consists of 13 members. Under
  Mexican law, as recently amended, a shareholder or group of shareholders owning
  10% or more of the capital stock of a company has the right to elect one regular
  and the corresponding alternate director.

The holders of C Shares will generally not be entitled to vote, or to attend
  or address meetings of shareholders at which they are not entitled to vote.
  However, under Mexican law, classes of shareholders (including holders of non-voting
  stock such as the C Shares) are entitled to vote as a class in a special meeting
  governed by the same rules that apply to extraordinary general meetings, as
  described below, on any action that would prejudice the rights of holders of
  shares of other series, and a holder of shares of such series would be entitled
  to judicial relief against any such action taken without such a vote. The determination
  whether an action requires a class vote on these grounds would initially be
  made by the Board. In certain cases, the Board, the statutory auditors or a
  Mexican court could call a special meeting. A negative determination would be
  subject to judicial challenge by an affected shareholder and the necessity for
  a class vote would ultimately be determined by a court. There are no other procedures
  for determining whether a particular proposed shareholder action requires a
  class vote, and Mexican law does not provide extensive guidance on the criteria
  to be applied in making such a determination.

Holders of GDSs are entitled to instruct the Depositary how to vote the shares
  comprising the Units represented by their respective GDSs, subject to the terms
  of the Deposit Agreement.

General shareholders' meetings may be ordinary general meetings or extraordinary
  general meetings. Extraordinary general meetings are those called to consider
  certain matters specified in the Mexican Companies Law and the Bylaws including,
  principally, amendments of the Bylaws, liquidation, dissolution, merger and
  transformation from one form of company to another and increases and reductions
  of the fixed portion of the capital stock. General meetings called to consider
  all other matters are ordinary meetings. An ordinary general meeting of the
  holders of B Shares must be held at least once each year within the first four
  months following the end of the preceding fiscal year to consider the approval
  of the financial statements of CCM and certain of its subsidiaries for the preceding
  fiscal year, to elect directors for holders of B Shares and statutory auditors,
  to determine the compensation of all directors or statutory auditors, and to
  determine the allocation of the profits or losses of the preceding year.

The quorum for an ordinary general meeting of the B Shares on first call is
  50% plus one of such shares, and action may be taken by 50% plus one of the
  outstanding B Shares. If a quorum is not available, a second meeting may be
  called at which action may be taken by a majority of the B Shares present, regardless
  of the number of such shares.

The quorum for an extraordinary general meeting is at least 75% and a majority
  of all of the outstanding shares that are entitled to vote on first and successive
  calls, respectively, and action may be taken by a vote of 50% plus one of the
  outstanding shares that are entitled to vote.

Holders of GDRs will be entitled to instruct the Depositary as to the exercise
  of the voting rights pertaining to the B Shares and the limited voting rights
  pertaining to the C Shares forming the Units represented by their GDSs.

Under Mexican law, holders of 33% of our outstanding shares may have any shareholder
  action suspended pending final judicial resolution by filing a complaint with
  a Mexican court of competent jurisdiction within 15 days after the close of
  the meeting at which such action was taken, by showing that the challenged action
  violates Mexican law or the Bylaws. Relief under these provisions is only available
  to holders (i) who were entitled to vote on the challenged shareholder action
  and (ii) whose shares were not represented when the action was taken or, if
  represented, were voted against it.

Shareholders' meetings may be called by the Board, our statutory auditors or
  a Mexican court. The Board or the statutory auditors may be required to call
  a meeting of the shareholders at the written request of the holders of 33% of
  the B Shares or, in the case of a meeting at which holders of C Shares would
  be entitled to vote, at the written request of the holders of 33% of the outstanding
  C Shares. In the event that a meeting is not called within 15 days following
  the date of such request, a Mexican court may require such meeting to be called.
  Notices of meetings and agendas therefor must be published in the Diario Oficial
  de la Federacion or a newspaper of general circulation in Mexico City at least
  15 days prior to the date set for the meeting. Meetings may be held without
  such publication, provided that 100% of the shares entitled to vote are represented.
  To attend a meeting, shareholders must deposit their shares prior to such meeting
  as indicated in the notice. If entitled to attend the meeting, a shareholder
  may be represented by an attorney-in-fact.

Dividends and Distributions

At the annual ordinary general meeting of holders of B Shares, the Board submits
  our financial statements for the previous fiscal year together with a report
  thereon by the Board and the report of the statutory auditor, to the holders
  of B Shares for approval. The holders of B Shares, once they have approved the
  financial statements, determine the allocation of our net profits for the preceding
  year. They are required by law to allocate at least 5% of such net profits to
  a legal reserve, which is not thereafter available for distribution except as
  a stock dividend, until the amount of the legal reserve equals 20% of historical
  capital stock (before effect of restatement). See Note 14 to our Annual Financial
  Statements. Thereafter, the shareholders may determine and allocate a certain
  percentage of net profits to any general or special reserve, including a reserve
  for open-market purchases of our shares. The remainder of net profits is available
  for distribution in the form of dividends to the shareholders, subject to the
  terms of certain restrictive covenants contained in certain of our indebtedness.
  See "Item 3-Key Information-Dividends.

Holders of the B Shares and C Shares and, accordingly, holders of Units and
  B Units, will have equal rights, on a per share basis, to dividends and other
  distributions, including any distributions upon our liquidation.

Capital Variations

The fixed portion of our capital stock may only be increased or decreased by
  resolution of an extraordinary general meeting of shareholders, subject to the
  exception that we may decrease our fixed capital stock under certain circumstances
  without such a resolution if we, in accordance with the Securities Market Law,
  repurchase our shares, whereas the variable portion of our capital stock may
  be increased or decreased by resolution of an ordinary or extraordinary general
  meeting of shareholders (except in connection with repurchases of shares where
  no shareholders meeting is required). Increases and decreases in our capital
  stock must be recorded in our book of capital variations. Any increase or decrease
  in our capital stock is subject to the limitations that the variable portion
  of the capital stock may not exceed the equivalent of 10 times the fixed portion
  of the capital stock and that the C Shares may not at any time represent more
  than 25% of our capital stock.

Pre-emptive Rights

Except in certain circumstances involving a public offering and requiring prior
  CNBV approval (including the Offerings) or in connection with the placement
  of our shares which were previously repurchased, in the event of a capital increase,
  a holder of existing shares of a given series has a preferential right to subscribe
  for a sufficient number of shares of the same series to maintain the holder's
  existing proportionate holdings of shares of that series. For example, subject
  to certain exceptions, if we issued B Shares and C Shares in the form of Units
  and B Shares in the form of B Units in the future, pursuant to and subject to
  applicable Mexican law, each holder of Units and B Units would be entitled to
  subscribe for a sufficient number of Units and/or B Units, as the case may be,
  to maintain such holder's then-existing proportionate holdings of B Shares and
  C Shares, and the Principal Shareholders would be entitled to subscribe for
  a sufficient number of B Units and Units to maintain their proportionate holdings
  of B Shares and C Shares with respect thereto. Pre-emptive rights must be exercised
  during a term fixed by the shareholders at the meeting declaring such capital
  increase, which term may not end before at least 15 days following the publication
  of notice of the capital increase in the official gazette of the corporate domicile.
  Under Mexican law, pre-emptive rights cannot be waived in advance and cannot
  be represented by an instrument that is negotiable separately from the corresponding
  share. Holders of GDSs may be restricted in their ability to participate in
  the exercise of such pre-emptive rights.

The Principal Shareholders have advised us that they may exercise their pre-emptive
  rights to subscribe for a sufficient number of B Shares so that they will own
  B Shares, including the Control Position, representing a majority of the outstanding
  B Shares, in connection with any primary sale of equity by us in the future.
  See "Item 3. Key Information-Risk factors."

Other Provisions

Redemption. The B Shares and the C Shares are subject to redemption
  in connection with either (i) a reduction of share capital or (ii) a redemption
  with retained earnings, which, in either case, must be approved by our shareholders
  at an extraordinary general shareholders' meeting. The shares subject to any
  such redemption would be selected by us by lot or in the case of redemption
  with retained earnings, by purchasing shares on the Mexican Stock Exchange,
  in accordance with the Mexican Companies Law, provided that in no case can shares
  be redeemed in such a way that the number of currently outstanding C Shares
  represents more than 25% of our capital stock.

Fixed and Variable Capital. We are permitted to issue shares constituting
  fixed capital and shares constituting variable capital. The fixed minimum part
  without right to withdrawal of our capital amounts to the sum of Ps.1,000,000,000.00
  and it is represented by 1,000,000,000 shares. The issuance of variable-capital
  shares, unlike the issuance of fixed-capital shares, does not require an amendment
  of the Bylaws, although it does require a vote of 50% plus one of the B Shares
  at an ordinary general meeting of shareholders. Under Mexican law and the Bylaws,
  if we issued variable capital shares, any holder of such shares would be entitled
  to redeem them at the holder's option at any time at a redemption price equal
  to the lower of (i) 95% of the average market value of such shares on the Mexican
  Stock Exchange for 30 trading days on which the shares were quoted preceding
  the date on which the exercise of the option is effective and (ii) the book
  value of such shares at the end of the fiscal year in which the exercise of
  the option is effective. If the option is exercised during the first three quarters
  of a fiscal year, it is effective at the end of that fiscal year, but if it
  is exercised during the fourth quarter, it is effective at the end of the next
  succeeding fiscal year. The redemption price would be payable following the
  annual ordinary general meeting of holders of B Shares at which the relevant
  annual financial statements were approved.

Forfeiture of Shares. As required by Mexican law, the Bylaws provide
  that non-Mexican holders of B Shares, C Shares, Units and B Units formally agree
  with the Foreign Affairs Ministry (i) to be considered as Mexicans with respect
  to the B Shares, the C Shares, the Units and the B Units that they acquire or
  hold as well as the property, rights, concessions, participations or interests
  owned by us or to the rights and obligations derived from any agreements the
  Company has with the Mexican government and (ii) not to invoke the protection
  of their own governments. Failure to comply may result in a penalty of forfeiture
  of such a shareholder's capital interests in favor of Mexico. In the opinion
  of Santamarina y Steta, S.C., our Mexican counsel, under this provision a non-Mexican
  shareholder (including non-Mexican holders of GDSs) is deemed to have agreed
  not to invoke the protection of his own government by asking such government
  to interpose a diplomatic claim against the Mexican government with respect
  to the shareholder's rights as a shareholder, but is not deemed to have waived
  any other rights it may have, including any rights under the United States securities
  laws, with respect to its investment in us. If the shareholder should invoke
  governmental protection in violation of this agreement, its shares could be
  forfeited to the Mexican government.

Exclusive Jurisdiction. The Bylaws provide that legal actions relating
  to our relationship and the shareholders may be brought only in courts in the
  Federal District of Mexico City.

Purchase by CCM of its Shares. We generally may not repurchase our shares,
  subject to certain exceptions. First, we may repurchase shares for cancellation
  with distributable earnings pursuant to a decision of an extraordinary general
  meeting of shareholders. Second, pursuant to judicial adjudication, we may acquire
  the shares of a shareholder in satisfaction of a debt owned by such shareholder
  to us, we must sell any shares so acquired within three months, otherwise our
  capital stock will be reduced and such shares canceled. Third, in accordance
  with the Securities Market Law and our Bylaws, we may repurchase our shares
  representing our capital on the Mexican Stock Exchange at any time at the then-prevailing
  market price. Any such repurchase must be approved by the Board of Directors.
  Our capital stock would be reduced automatically in an amount equal to the theoretical
  value of each repurchased share (determined by dividing the outstanding capital
  stock of CCM by the number of shares outstanding immediately prior to such repurchase);
  in the event that the purchase price of such shares exceeded the theoretical
  value, the difference would be paid for with amounts allocated from net earnings
  to a special reserve created for the repurchase of shares. Repurchased shares
  would be held by us as treasury stock, pending future placements thereof which
  could be effected on the Mexican Stock Exchange. Our capital stock would be
  automatically increased upon the resale of shares in an amount equal to their
  theoretical value; any excess amount would be allocated to the special reserve
  referred to above. The economic and voting rights corresponding to such repurchased
  shares may not be exercised during the period in which such shares are owned
  by us and such shares would not be deemed to be outstanding for purposes of
  calculating any quorum or vote at any shareholder's meeting during such period.
  In no event may such repurchase result in a percentage of C Shares in excess
  of that permitted by the Bylaws or applicable law.

Obligation of Majority Shareholders. In accordance with the Mexican
  Securities Market Law, persons deemed to control us, including the Principal
  Shareholders, will be required to make a public offer to repurchase any shares
  held by minority shareholders (at the higher of the average market price during
  the 30 preceding days or at book value) in the event that either us or the CNBV
  cancels the registration of such shares with the National Register of Intermediaries
  and Securities, or RNVI.

Conflict of interest.Any shareholder that has a direct interest with
  respect to a certain transaction shall abstain from voting with respect to such
  transaction at the relevant shareholders' meeting. A shareholder that votes
  on a business transaction in which its interest conflicts with that of CCM may
  be liable for damages, but only if the transaction would not have been approved
  without our vote.

Appraisal rights. Whenever the shareholders approve a change of corporate
  purposes, change of nationality of the corporation or transformation from one
  form of company to another, any shareholder entitled to vote on such change
  that has voted against it may withdraw from us and receive the amount calculated
  as specified under Mexican law attributable to its shares, provided that it
  exercises its right within 15 days following the adjournment of the meeting
  at which the change was approved. Because the C Shares may not vote on these
  matters, such appraisal rights are not available to such holders of C Shares,
  including C Shares underlying the Units.

Actions against Directors. Action for civil liabilities against the
  directors may be initiated by resolution of an ordinary shareholders' meeting.
  In the event the ordinary shareholders' meeting decides to bring such action,
  the directors against whom such action is to be brought will immediately cease
  to be directors. Additionally, shareholders representing not less than 15% of
  the outstanding shares may directly exercise such action against the directors,
  provided that (i) such shareholders shall not have voted in favor of not exercising
  such action at the relevant shareholders' meeting, and (ii) the claim covers
  all the damages alleged to have been caused to us and not only the portion corresponding
  to such shareholders. Any recovery of damages with respect to such action will
  be for the benefit of us and not for the shareholders bringing this action.

Material Contracts

In June 1991, we entered into a joint venture with Costco. This joint venture
  is governed by a board of directors consisting of six members, three of who
  are appointed by us (including the chairman of the board of the joint venture)
  and the other three are appointed by Costco. The management agreements may be
  terminated by either Costco or the Costco Mexico joint venture at any time,
  and any termination initiated by the joint venture must be approved by a majority
  (at least four directors consisting of two representatives of each of CCM and
  Costco) of its board of directors. The affirmative vote of a majority of the
  entire board of directors of the joint venture is required to approve certain
  significant decisions regarding the joint venture, including, among other things,
  certain revisions to the joint venture business plan, obligations or acquisitions
  of real estate or certain other fixed assets not otherwise provided for in the
  business plan, the removal of any of the management personnel appointed by Costco
  and certain transfers of ownership interests in the joint venture. In addition,
  the affirmative vote of both members of a two-person executive committee consisting
  of the chief executive officers of both Costco and us is required to approve
  certain obligations not otherwise provided for in the business plan and other
  significant decisions regarding the joint venture which are not specially reserved
  for the board of directors.

The joint venture has a duration of 99 years, ending in the year 2090. However,
  the joint venture agreement may be terminated and the joint venture dissolved,
  (i) by mutual agreement of Costco and us, and (ii) upon a sale by either party
  of its entire interest in the joint venture by written agreement. We or Costco
  may purchase the other party's interest in the joint venture at a price determined
  by reference to the fair market value of that interest in the event that the
  other party (i) fails to provide its portion of the financing to the joint venture,
  (ii) fails to provide or maintain and guarantee pursuant to the joint venture
  agreement, (iii) transfers its interest to an unaffiliated third party without
  the consent of the board of directors of the joint venture, (iv) is unable to
  resolve with the other party within a prescribed period a deadlock of the board
  of directors, (v) is in default of its obligations under the joint venture agreement,
  (vi) is insolvent or bankrupt, or (vii) undergoes a change of control.

During 2001 and 2000, each of Costco and CCM contributed U.S. $28.5 million
  and U.S. $10.0 million, respectively, to the joint venture.

Legal Proceedings

We are involved in certain legal proceedings incidental to the normal conduct
  of our business, which management does not believe will, in the aggregate, be
  material to our consolidated financial condition.

Exchange Controls and Restrictions on Foreign Investment

Exchange Rates and Controls

The Mexican economy has suffered balance of payments deficits and shortages
  in foreign exchange reserves. While the Mexican Government does not currently
  restrict the ability of Mexican or foreign persons or entities to convert Pesos
  to U.S. Dollars, no assurance can be given that the Mexican Government will
  not institute a restrictive exchange control policy in the future (as has been
  the case in the past). Any such restrictive exchange policy could have a material
  adverse effect on our business and financial condition. See "Item 3. Key Information-Risk
  Factors-Currency Fluctuations and Exchange Controls".

Except for the period from September through December 1982, during the Mexican
  liquidity crisis, Banco de Mexico consistently has made foreign currencies available
  to Mexican private sector entities (such as the Company) to meet their foreign
  currencies obligations. Nevertheless, in the event of renewed shortages of foreign
  currencies there can be no assurance that Banco de Mexico would continue to
  make foreign currencies available to private sector companies or that foreign
  currencies needed by us to service foreign currency obligations could be purchased
  in the open market without substantial additional cost.

Fluctuations in the exchange rate between the Peso and the U.S. dollar will
  affect the U.S. dollar equivalent of the Peso price of the securities on the
  Mexican Stock Exchange, including the Units and, as a result, will likely affect
  the market price of the GDSs. Such fluctuations also would affect the conversion
  by the Depositary into U.S. dollars of any cash dividends paid in Pesos on the
  B Shares and the C Shares comprising the Units.

Foreign Investment Legislation

Ownership by non-Mexicans of shares of Mexican enterprises is regulated by
  the 1993 Ley de Inversion Extranjera, or the Foreign Investment Law, and the
  1998 Reglamento de la Ley de Inversion Extranjera, or the Foreign Investment
  Regulations. The Comision Nacional de Inversiones Extranjeras, or National Foreign
  Investment Commission, administers the Foreign Investment Law and Regulations.
  To comply with the restrictions on percentages of capital stock that may be
  owned by non-Mexicans, Mexican companies typically limit the ownership of particular
  classes of their capital stock to Mexicans.

The Foreign Investment Law reserves certain economic activities exclusively
  for the Mexican State, certain other activities exclusively for Mexican individuals
  or Mexican corporations and limits the participation of non-Mexican investors
  to certain percentages in regard to enterprises engaged in activities specified
  therein. Foreign investors may freely participate in up to 100% of the capital
  stock of Mexican companies or entities except for those existing companies (i)
  engaged in reserved activities as referred to above and (ii) with assets exceeding
  the amount to be established annually by the Foreign Investment Commission (which
  has been set at Ps.85 million) in which case an approval from the Foreign Investment
  Commission will be necessary in order for foreign investment to exceed 49% of
  the capital stock. The Principal Shareholders have advised us that they intend
  to maintain the Control Position directly in the form of B Units. Pursuant to
  the Foreign Investment Law, unless appropriate authorization is obtained, the
  Control Position may be transferred only to Mexican nationals.

Mexican and non-Mexican nationals are entitled to hold, and to exercise the
  rights of a holder of, the Units, the B Units, the B Shares and the C Shares.
  The C Shares may not represent more than 25% of our capital stock.

Taxation

United States Taxes

General. The following is a summary of the anticipated material U.S.
  federal income tax consequences of the ownership and disposition of Units and
  GDSs except as otherwise noted, by U.S. Holders, as defined below. This discussion
  does not address all aspects of U.S. federal income taxation that may be relevant
  to a particular holder based on the holder's particular circumstances. For example,
  with respect to U.S. Holders, the following discussion does not address the
  U.S. federal income tax consequences to a U.S. Holder:

* that owns, directly, indirectly or through attribution, 2% or more of the
  total voting power or value of our shares; 
  * that is a dealer in securities, insurance company, financial institution,
  tax-exempt organization, U.S. expatriate, broker-dealer or trader in securities;
  or 
  * whose functional currency is not the U.S. dollar.

Also, this discussion does not consider:

* the tax consequences for the shareholders, partners or beneficiaries of a
  U.S. holder; or 
  * special tax rules that may apply to a U.S. holder that holds Units or GDSs
  as part of a "straddle," "hedge," "conversion transaction," "synthetic security"
  or other integrated investment.

In addition, the following discussion does not address any aspect of state,
  local or non-U.S. tax laws, other than Mexican tax laws. Further, this discussion
  generally applies only to U.S. Holders that hold the Units or GDSs as capital
  assets within the meaning of Section 1221 of the Internal Revenue Code. This
  summary does not constitute, and should not be considered as legal or tax advice
  to holders.

The description set forth below is based on the U.S. federal income tax laws
  as in force on the date of this annual report, including:

* the Internal Revenue Code of 1986, as amended, applicable Treasury Regulations
  and judicial and administrative interpretations; and 
  * the convention between the Government of the United States of America and
  the Government of the United Mexican States for the Avoidance of Double Taxation
  and the Prevention of Fiscal Evasion with Respect to Taxes on Income, including
  the applicable protocol, which we refer to as the tax treaty; 
  * and is subject to changes to those laws and the tax treaty subsequent to the
  date of this annual report, which changes could be made on a retroactive basis;
  and 
  * is also based in part on the representations of the Citibank, N.A. as depositary
  and on the assumption that each obligation in the deposit agreement relating
  to the Units and GDSs and any related agreement will be performed in accordance
  with its terms.

Holders should consult their own tax advisors as to the particular United States,
  Mexican or other tax consequences of the ownership and disposition of Units
  and GDSs which may be applicable to them.

As used in this section, the term "U.S. Holder" means a beneficial owner Units
  or GDSs that is, for U.S. federal income tax purposes: * a citizen or resident
  of the U.S.;

* a corporation or partnership created or organized in or under the laws of
  the United States or of any political subdivision of the United States, other
  than a partnership treated as foreign under U.S. Treasury regulations; 
  * an estate the income of which is included in gross income for U.S. federal
  income tax purposes regardless of source; or 
  * a trust, in general, if a U.S. court is able to exercise primary supervision
  over its administration and one or more U.S. persons have the authority to control
  all of its substantial decisions.

An individual may be treated as a resident of the United States in any calendar
  year for U.S. federal income tax purposes by being present in the United States
  on at least 31 days in that calendar year and for an aggregate of at least 183
  days during a three-year period ending at the close of that year. For purposes
  of this calculation, all of the days present in the current year, one-third
  of the days present in the immediately preceding year and one-sixth of the days
  present in the second preceding year would be counted. Residents are taxed for
  U.S. federal income purposes as if they were U.S. citizens.

The application of the tax treaty to U.S. Holders is conditioned upon, among
  other things, the assumptions that the U.S. Holder:

* is not a resident of Mexico for purposes of the tax treaty; 
  * is an individual who has a substantial presence in the United States; 
  * is entitled to the benefits of the tax treaty under the limitation on benefits
  provision contained in Article 17 of the tax treaty; and 
  * does not have a fixed place of business or a permanent establishment in Mexico
  with which its ownership of CPOs, GDSs or underlying A Shares, L Shares and
  D Shares is effectively connected.

Ownership of Units and Shares. In general, for the United States federal
  income tax purposes, U.S. Holders of GDSs will be treated as the owners of Units
  (and the shares comprising such Units (the "Shares")) represented by those GDSs.

Taxation of Dividends and Stock Distributions. Dividends paid out of
  current or accumulated earnings and profits (computed based on United States
  federal income tax principles) with respect to the Shares will be includible
  in the gross income of a U.S. Holder as ordinary income when the dividends are
  received by the U.S. Holder or the custodian on behalf of the U.S. Holder and
  will not be eligible for any dividends received deduction otherwise allowable
  to corporations under Section 243 of the Code. Such dividends paid in Pesos
  will be includible in the income of a U.S. Holder in a U.S. dollar amount calculated
  by reference to the exchange rate in effect on the day the pesos are received
  by the U.S. Holder or the custodian on behalf of the U.S. Holder. U.S. Holders
  should consult their own tax advisor regarding the treatment of any foreign
  currency gain or loss on any Pesos received by the U.S. Holder or the custodian
  on behalf of the U.S. Holder which are not converted into U.S. dollars on the
  day the Pesos are received.

A U.S. Holder may, subject to certain limitations, be eligible to claim as
  a credit or deduction, for purposes of computing such holder's United States
  federal income tax liability, any Mexican withholding tax paid in respect of
  dividends paid by the Company. Such dividends will generally constitute foreign-source
  income and will generally be classified as "passive income" or, in the case
  of certain U.S. Holders, "financial services income" for purposes of determining
  the United States foreign tax credit limitation. The calculation of United States
  foreign tax credits and, in the case of a U.S. Holder that elects to deduct
  foreign taxes, the availability of deductions, involves the application of complex
  rules that depend on a U.S. Holder's particular circumstances. U.S. Holders
  should consult their own tax advisors regarding the availability of foreign
  tax credits and deductions for such Mexican withholding tax.

Under rules enacted by the United States Congress in 1997 and other guidance
  released by the United States Department of the Treasury, foreign tax credits
  will not be allowed for withholding taxes imposed in respect of certain short-term
  or hedged positions in stock or in respect of arrangements in which a U.S. Holder's
  expected economic profit, after non-United States taxes, is insubstantial. U.S.
  Holders should consult their own tax advisers concerning the implications of
  these rules in light of their particular circumstances.

Distributions of additional Shares of the Company to U.S. Holders with respect
  to the Shares (and accompanying distributions with respect to Units and GDSs)
  that are made as part of a pro rata distribution to all shareholders of the
  Company generally will not be subject to United States federal income tax.

A holder of Units or GDSs that is with respect to the United States, not a
  U.S. Holder, or non-U.S. Holder will not be subject to United States federal
  income or withholding tax on dividends paid with respect to the Shares (or with
  respect to Units or GDSs), unless such income is effectively connected with
  the conduct by the Holder of a trade or business in the United States.

Taxation of Capital Gains. Gain or loss recognized by a U.S. Holder
  on the sale or other taxable disposition of Units or GDSs will be subject to
  United States federal income taxation as capital gain or loss in an amount equal
  to the difference (if any) between such U.S. Holder's tax basis in the Units
  or GDSs and the amount realized on the sale or other taxable disposition. Such
  capital gain or loss will be long-term capital gain or loss if the Units or
  GDSs have been held for more than one year at the time of the disposition. The
  deductibility of capital losses is subject to limitations. Capital gains recognized
  on a sale or other taxable disposition of Units or GDSs by a U.S. Holder generally
  will be treated as United States source income, unless such gains are subject
  to Mexican taxation under the Tax Treaty, in which case, a U.S. Holder generally
  will be permitted to elect to treat such gains as foreign source income for
  United States foreign tax credit purposes. Capital losses recognized on the
  sale or taxable disposition of Units or GDSs by a U.S. Holder generally will
  be allocated to reduce income from United States sources for United States foreign
  tax credit purposes. U.S. Holders should consult their tax advisors concerning
  the United States foreign tax credit implications of a disposition of Units
  or GDSs. Deposits and withdrawals of Units or GDSs by U.S. Holders will not
  be subject to United States federal income tax.

A non-U.S. Holder of Units or GDSs will not be subject to United States federal
  income or withholding tax on gain realized on the sale or other taxable disposition
  of Units or GDSs, unless

* such gain is effectively connected with the conduct by the holder of a trade
  or business in the United States, or 
  * in the case of gain realized by an individual holder, the holder is present
  in the United States for 183 days or more in the taxable year of the sale or
  other taxable disposition and certain other conditions are met.

Backup Withholding and Information Reporting. A U.S. Holder may be subject
  to U.S. information reporting and U.S. backup withholding at a rate of up to
  30% for dividends paid on the Units or GDSs, or proceeds from the sale or other
  disposition of Units or GDSs unless the U.S. Holder:

* is a corporation or comes within an exempt category; or 
  * provides a taxpayer identification number, certifies as to no loss of exemption
  from backup withholding tax and otherwise complies with the applicable requirements
  of the backup withholding rules.

The amount of any backup withholding will be allowed as a credit against the
  U.S. Holder's U.S. federal income tax liability and may entitle such holder
  to a refund provided that certain required information is furnished to the U.S.
  Internal Revenue Service.

A Non-U.S. Holder may be required to comply with certification and identification
  procedures in order to establish its exemption from backup withholding.

Mexican Taxes

General. The following is a general summary of the anticipated material
  Mexican tax consequences of the purchase, ownership and disposition of Units
  and GDSs to a person who is not a resident of Mexico for Mexican tax purposes
  as defined below.

An income tax treaty between the United States and Mexico is in effect (the
  "Tax Treaty"). Except as indicated below under "-Taxation of Capital Gains,"
  the Tax Treaty will not have any material effect on the Mexican tax consequences
  described herein.

This summary is based upon the tax laws of Mexico as in effect on the date
  of this Annual Report, which are subject to change. Holders should consult their
  own tax advisors as to the particular United States, Mexican or other tax consequences
  of the purchase, ownership and disposition of Units or GDSs which may be applicable
  to them and as to their entitlement to the benefits afforded by the Tax Treaty
  or other income tax treaty to which Mexico is a party.

For purposes of Mexican taxation, an individual is a resident of Mexico if
  he has established his home in Mexico, unless he has resided in another country
  for more than 183 calendar days, whether consecutive or not, during a year and
  can demonstrate that he had become a resident of that country for tax purposes,
  and a legal entity is a resident of Mexico if its principal administrative body
  is located in Mexico. A Mexican citizen or a legal entity with its corporate
  domicile in Mexico and established under Mexican law is presumed to be a resident
  of Mexico unless such person or entity can demonstrate otherwise. If a legal
  entity is deemed to have a permanent establishment or fixed base in Mexico for
  tax purposes, all income attributable to such permanent establishment or fixed
  base shall be required to pay taxes in Mexico in accordance with applicable
  law.

Taxation of Dividends. Dividends, either in cash or in any form, paid
  with respect to Shares underlying the Units, including those represented by
  GDSs, will be subject to a Mexican withholding tax that is calculated on a gross-up
  basis. Under the Tax Treaty, the current withholding tax rate is 5%. Holders
  should consult their tax advisors for a determination of the applicable withholding
  rate and of their possible eligibility for a reduced rate under any of the other
  applicable treaties currently in effect. The Company will be required to pay
  35% tax on the dividend multiplied by 1.5385 if the dividend is not paid from
  earnings which have already been subject to income taxation, as shown in the
  required record of such earnings called "cuenta de utilidad neta" or "previously
  taxed net earnings".

Taxation of Capital Gains. The sale or other disposition of GDSs will
  not be subject to Mexican tax. Deposits and withdrawals of Units for GDSs will
  not give rise to Mexican tax or transfer duties.

The sale or other disposition of Units will not be subject to any Mexican tax
  if the sale is carried out through the Mexican Stock Exchange or other recognized
  securities market, as determined by Mexican tax authorities under general rules.
  Sales or other dispositions of Units made in other circumstances would be subject
  to Mexican income tax. Under the Tax Treaty, gains on the disposition of Units
  by less than 25% U.S. Holders eligible for benefits under the Tax Treaty will
  not be subject to Mexican tax, unless (i) 50% or more of the fair market value
  of the Company's assets consist of "immovable property" (as defined in the treaty)
  situated in Mexico, or (ii) such gains are attributable to a permanent establishment
  or fixed base of such U.S. Holder in Mexico. Because of uncertainty regarding
  the interpretation of the relevant provision of the Tax Treaty there can be
  no assurance that 50% or more of the fair market value of CCM's assets do not
  or will not consist of "immovable property" situated in Mexico. Gains of a non-U.S.
  Holder eligible for benefits under a treaty to which Mexico is a party may be
  exempt (in whole or in part) from Mexican tax under such treaty. Holders should
  consult with their tax advisors as to their entitlement to benefits afforded
  by an applicable income tax treaty.

Other Mexican Taxes.There are no Mexican inheritance or succession
  taxes applicable to the ownership, transfer or disposition of Units or GDSs.
  There are no Mexican stamp, issuer, registration or similar taxes or duties
  payable by holders of Units or GDSs.

Documents on Display

For further information about us and our securities, we refer you to the filings
  we have made with the U.S. Securities and Exchange Commission, or the SEC.

We are subject to the informational requirements of the Securities Exchange
  Act of 1934 and, in accordance with these requirements, file reports and other
  information with the SEC. These reports and other information, as well as any
  related exhibits and schedules, may be read and copied at the SEC's public reference
  facility at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
  D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on
  the public reference rooms and their copy charges. These reports and other information
  may also be inspected at the offices of the New York Stock Exchange, 20 Broad
  Street, New York, New York 10005. As a foreign private issuer, we are not required
  to furnish proxy statements to holders of our GDSs.

As an issuer of securities listed on the Mexican Stock Exchange, we are required
  to file unaudited quarterly financial statements and audited annual financial
  statements as well as various periodic reports with the CNBV and the Mexican
  Stock Exchange. Recently, the internal regulations of the Mexican Stock Exchange
  were amended to implement the EMISNET. Issuers of listed securities must prepare
  and disclose their financial information by a Mexican Stock Exchange-approved
  system known as the Sistema de Informacion Financiera Computarizada, or Computerized
  Financial Information System, commonly known as the SIFIC. Immediately upon
  its receipt, the Mexican Stock Exchange makes that information available to
  the public. In addition, as a Mexican listed company, we must file through the
  EMISNET, an automated system for the electronic transfer of the information
  required to be filed with the Mexican Stock Exchange and the CNBV, information
  regarding the occurrence of material events specified in Mexican Securities
  regulations.

Item 11. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risks, including adverse changes in interest rates
  and foreign currency exchange rates as discussed below:

Interest Rate Risk

We are exposed to market risk from changes in interest rates which may adversely
  affect our financial position, results of operations and cash flows. In seeking
  to minimize the risks from interest rate fluctuations, we manage exposures through
  our regular operating and financing activities. We are subject to interest rate
  risk through our borrowing activities which include U.S. dollar-denominated
  Senior Notes having an aggregate principal amount of U.S.$100 million, and an
  indexed peso denominated fixed rate debenture instrument for a principal amount
  of 172.9 million UDIs. Except as set forth below, we currently do not enter
  into interest rate derivative instruments for hedging or trading purposes. To
  discuss. See "Foreign Exchange Rate Risk". Further details on the derivative
  instruments are disclosed in Note 8 to the Financial Statements. The table below
  provides information about our financial instruments that are sensitive to changes
  in interest rates. For each instrument the table presents annual amortization
  of notional amounts and weighted average interest rates by contractual maturity
  dates. The fair value of each of the items below is based on the current rates
  available to us for the remaining outstanding debt of the same remaining maturity.

|Expected Maturity Date
|----------------------
|                      
|Long-term debt:       
|Fixed rate            
|Average interest rate 

During 2001 and 2000, we engaged in the following transactions:

* On February 28, 2001 we renegotiated the forward agreement for the purchase
  of U.S.$20 million effective from March 1, 2001 to April 14, 2005, when we will
  be obligated to pay the Mexican peso equivalent of 74,004,278 UDIs.

* In December 2001, the Company entered into a forward contract for the purchase
  of U.S.$30 million at the exchange rate of Ps. 9.85 per dollar, effective from
  December 3, 2001 to December 27, 2002, provided that the exchange rate does
  not rise above Ps. 11.25 per dollar during the term of the contract. If the
  exchange rate were to rise about Ps. 11.25 per dollar, our obligations under
  this contract would be terminated.
  * In December 2000, the Company established an UDI-indexed, peso-denominated
  debenture program pursuant to which it could issue debentures in an aggregate
  amount of up to 500 million UDIs. Under this program, the Company issued debentures
  with a face value of 172.9 million UDIs with a fixed interest rate of 8%, payable
  semi-annually over a ten year term. The contract includes restrictive covenants
  which (i) limit our ability to (a) issue additional debt; (b) incur encumbrances;
  (c) enter into or effectuate mergers, spin-offs or sale of assets; and (d) pay
  dividends; and (ii) require that we maintain a certain degree of priority (guarantee).

Foreign Exchange Rate Risk

We have U.S. dollar-denominated long-term debt and is subject to foreign currency
  exchange rate risk on cash flows related to interest and principal payments.
  We currently entered into foreign currency derivative instruments for hedging
  of approximately U.S.$30 million of the dollar-denominated debt. Gains or losses
  related to these payments are recognized in income in the period incurred.

The fair values are based on the rates at which we could borrow funds with
  similar terms and remaining maturities at the dates presented.

Item 12. Description of Securities Other than Equity Securities

Not applicable.

PART II

Item 13. Defaults, Dividend Arrearages and Delinquencies

Not applicable.

Item 14. Material Modifications to the Rights of Security Holders and Use
  of Proceeds

Not applicable.

PART III

Item 15. [Reserved]

Not applicable.

Item 16. [Reserved]

Not applicable.

PART IV

Item 17. Financial Statements

See pages F-1 through F-6, which are incorporated herein by reference.

Item 18. Financial Statements

We have responded to Item 17 in lieu of Item 18.

Item 19. Exhibits

(a) List of Financial Statements 
  Report of Independent Accountants Consolidated Balance Sheets as of December
  31, 2000 and 2001 
  Consolidated Statements of Income for the Years Ended December 31, 1999, 2000
  and 2001. 
  Consolidated Statements of Changes in Stockholders' Equity for the Years ended
  December 31, 1999, 2000 and 2001. 
  Consolidated Statements of Changes in Financial Position for the Years ended
  December 31, 1999, 2000 and 2001. 
  Notes to Consolidated Financial Statements.

All other schedules relating to us are omitted because they are not required
  or because the required information is contained in our Financial Statements
  or Notes thereto.

(b) List of Exhibits 
  3.1 Amended and Restated Bylaws (Estatutos Sociales) of the Registrant.1 
  4.1 Indenture, dated as of April 14, 1998, for the Senior Notes between the
  Registrant and IBJ Schroder Bank & Trust Company as Trustee.2 
  10.1 Form of Indemnity Agreement between the Registrant and its directors and
  its executive officers.3 
  10.2 Restated Corporate Joint Venture Agreement dated February 15, 1995, between
  the Price Company and Price Venture Mexico and CCM.3 
  10.3 Credit Agreement, dated as of May 24, 1996, among CCM, Comerical Mexicana
  S.A. de C.V., the Banks listed therein and Morgan Guaranty Trust Company of
  New York, as Agent.3 
  10.4 Form of Share Purchase Agreement between us and certain employees.3 
  10.5 Form of Registration Rights Agreement between the Company and each of Messrs.
  Carlos González Nova, Jamie González Nova and Guillermo González Nova.3

SIGNATURES

Pursuant to the requirements of Section 12 of the Securities Exchange Act of
  1934, the registrant certifies that it meets all of the requirements for filing
  on Form 20-F and has duly caused this Annual Report to be signed on its behalf
  by the undersigned, thereunto duly authorized.

CONTROLADORA COMERCIAL MEXICANA, S.A. DE C.V.

Registrant

By: /s/ Francisco Martinez de la Vega 
  Francisco Martinez de la Vega 
  Chief Financial and Administrative Officer 
  Dated: July 1, 2002

---

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


CONTROLADORA COMERCIAL MEXICANA, S.A. DE C.V.

|Report of Independent Accountants                                                                                       | F-2
|----------------------------------------------------------------------------------------------------------------------- | ---
|Consolidated Balance Sheets as of December 31, 2001 and
        2000                                                    | F-3
|Consolidated Statements of Income for the Years Ended
        December 31, 2001, 2000 and 1999                          | F-4
|Consolidated Statements of Changes in Stockholders' Equity
        for the Years Ended December 31, 2001, 2000 and 1999 | F-5
|Consolidated Statements of Changes in Financial Position
        for the Years Ended December 31, 2001 and 2000         | F-6
|Notes to Consolidated Financial Statements                                                                              | F-7

---

Report of Independent Accountants

To the Stockholders of 
  Controladora Comercial Mexicana, S.A. de C.V.

We have audited the consolidated balance sheets of Controladora Comercial Mexicana,
  S.A. de C.V. and subsidiaries as of December 31, 2001 and 2000, and the related
  consolidated statements of income, changes in stockholders' equity and changes
  in financial position for each of the three years in the period ended December
  31, 2001. These financial statements have been prepared in accordance with accounting
  principles generally accepted in Mexico and are the responsibility of the Company's
  management. Our responsibility is to express an opinion on these financial statements
  based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
  in Mexico and the United States of America. Those standards require that we
  plan and perform the audit to obtain reasonable assurance about whether the
  financial statements are free of material misstatement. An audit includes examining,
  on a test basis, evidence supporting the amounts and disclosures in the financial
  statements. An audit also includes assessing the accounting principles used
  and significant estimates made by the management, as well as evaluating the
  overall financial statement presentation. We believe that our audits provide
  a reasonable basis for our opinion.

As discussed in Note 2k to the financial statements, beginning January 1, 2000,
  the Company adopted the guidelines of amended Bulletin D-4 " Accounting Treatment
  of Income Tax, Assets Tax and Employee Statutory Profit Sharing".

In our opinion, the financial statements referred to above present fairly,
  in all material respects, the consolidated financial position of Controladora
  Comercial Mexicana, S.A. de C.V. and subsidiaries as of December 31, 2001 and
  2000, and the consolidated results of operations, changes in stockholders' equity
  and changes in financial position for each of the three years in the period
  ended December 31, 2001, in conformity with accounting principles generally
  accepted in Mexico.

Accounting principles generally accepted in Mexico vary in certain significant
  respects from accounting principles generally accepted in the United States.
  Application of accounting principles generally accepted in the United States
  would have affected the determination of the consolidated results of operations
  for each of the three years in the period ended December 31, 2001 and stockholders'
  equity at December 31, 2001 and 2000, to the extent summarized in Note 18 to
  the financial statements.

PricewaterhouseCoopers

Manuel Garcia Braña

Mexico, D.F.
  March 1, 2002.

---

|CONTROLADORA COMERCIAL MEXICANA, S.A. DE C.V.
      AND SUBSIDIARIES                      
|------------------------------------------------------------------------------------------
|CONSOLIDATED BALANCE SHEETS                                                               
|At December 31, 2001 and 2000                                                             
|(In thousands of Mexican pesos of constant
      purchasing power as of Decembre 31, 2001)
|ASSETS                                                                                    
|                                                                                          
|Current assets:                                                                           
|Cash                                                                                      
|Temporary investments (Note 4)                                                            
|Trade accounts receivable                                                                 
|Other accounts and notes receivable (Note 5)                                              
|Accounts receivable from affiliated companies, net                                        
|Inventories                                                                               
|Prepaid expenses and other assets                                                         
|                                                                                          
|Permanent investments (Note 4)                                                            
|Property, equipment and leasehold improvements, net (Note 7)                              
|Other assets                                                                              
|Total assets                                                                              
|LIABILITIES AND STOCKHOLDERS' EQUITY                                                      
|Current liabilities:                                                                      
|Trade payables                                                                            
|Taxes payable                                                                             
|Forward agreement (Note 8)                                                                
|Other accrued liabilities                                                                 
|                                                                                          
|Long-term liabilities:                                                                    
|Long-term debt and forward agreement (Note 8)                                             
|Labor obligations (Note16)                                                                
|Deferred income taxes (Note 15)                                                           
|Total liabilities                                                                         
|Stockholders' equity:                                                                     
|Contributed capital (Note 11):                                                            
|Capital stock                                                                             
|Restatement                                                                               
|                                                                                          
|Paid in-capital, net                                                                      
|                                                                                          
|Earned capital (Note 13):                                                                 
|Legal reserve                                                                             
|Retained earnings                                                                         
|Reserve for repurchase of units                                                           
|Units repurchased for stock purchase plan                                                 
|Result from holding nonmonetary assets                                                    
|Net income for the year                                                                   
|Total earned capital                                                                      
|Total majority stockholders' equity                                                       
|Minority interest                                                                         
|Total stockholders' equity                                                                
|Total liabilities and stockholders' equity                                                
|The accompanying notes are an integral part of these
        financial statements.        

|CONTROLADORA COMERCIAL MEXICANA, S.A. DE C.V. AND SUBSIDIARIES                                               
|-------------------------------------------------------------------------------------------------------------
|CONSOLIDATED STATEMENTS OF INCOME                                                                            
|For the years ended December 31, 2001, 2000 and 1999                                                         
|(In thousands of Mexican pesos of constant purchasing power as of Decembre 31, 2001, except for unit amounts)
|                                                                                                             
|                                                                                                             
|                                                                                                             
|Net sales                                                                                                    
|Cost of sales                                                                                                
|Gross profit                                                                                                 
|                                                                                                             
|Operating expenses:                                                                                          
|Selling                                                                                                      
|Administrative                                                                                               
|                                                                                                             
|Operating income                                                                                             
|                                                                                                             
|Integral result of financing:                                                                                
|Interest expense                                                                                             
|Loss from forward agreement                                                                                  
|Interest income                                                                                              
|Gain from repurchase of notes                                                                                
|Foreign-exchange gain (loss), net                                                                            
|Gain from monetary position                                                                                  
|                                                                                                             
|                                                                                                             
|Income after integral result of financing                                                                    
|                                                                                                             
|                                                                                                             
|Miscellaneous expense, net                                                                                   
|                                                                                                             
|Income before provisions                                                                                     
|                                                                                                             
|Provision for iIncome taxes and  employee                                                                    
|statutory profit sharing  (Note 15)                                                                          
|                                                                                                             
|Income before minority interest                                                                              
|Interest of minority stockholders in the results                                                             
|of subsidiaries                                                                                              
|                                                                                                             
|Net income for the year                                                                                      
|                                                                                                             
|Per unit of capital stock:                                                                                   
|Income befre minority interest                                                                               
|Minority interest                                                                                            
|Net income                                                                                                   
|                                                                                                             
|                                                                                                             
|The accompanying notes are an integral part of these financial statements.                                   

|CONTROLADORA COMERCIAL MEXICANA, S.A. DE C.V.
      AND SUBSIDIARIES                                               
|-------------------------------------------------------------------------------------------------------------------
|CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDES'
      EQUITY                                                    
|For the years ended December 31, 2001, 2000
      and 1999                                                         
|(In thousands of Mexican pesos of constant
      purchasing power as of December 31, 2001, except for unit amounts)
|                                                                                                                   
|
|
|
|
|Ps                                                                                                                 
|Balances as of December 31, 1998                                                                                   
|Resolutions of the General Ordinary Stockholders'Meeting
      held on April 15, 1999:                             
|Transfer to retained earnings                                                                                      
|Increase legal reserve                                                                                             
|Dividends paid (Ps 0.09 per unit)                                                                                  
|Repurchase of units for stock purchase plan, net                                                                   
|Reissuance of units for treasury stock, net                                                                        
|Increase in minority interest                                                                                      
|Comprenhensive income (Note 13)                                                                                    
|Balances as of December 31, 1999                                                                                   
|Resolutions of the General Ordinary Stockholders'Meeting
      held on April 14, 2000:                             
|Transfer to retained earnings                                                                                      
|Increase legal reserve                                                                                             
|Dividends paid (Ps 0.092 per unit)                                                                                 
|Repurchase of units for stock purchase plan, net                                                                   
|Repurchase of units for treasury stock, net                                                                        
|Initial effects of deferred taxes                                                                                  
|Decrease in minority interest                                                                                      
|Comprenhensive income (Note 13)                                                                                    
|Balances as of December 31, 2000                                                                                   
|Resolutions of the General Ordinary Stockholders'Meeting
      held on April 5, 2001:                              
|Transfer to retained earnings                                                                                      
|Increase legal reserve                                                                                             
|Dividends paid (Ps 0.107 per unit)                                                                                 
|Increase in the reserve for repurchase of units                                                                    
|Reissuance of units for stock purchase plan, net                                                                   
|Reissuance of units for treasury stock, net                                                                        
|Decrease in minority interest                                                                                      
|Comprenhensive income (Note 13)                                                                                    
|Balances as of December 31, 2001                                                                                   
|The accompanying notes are integral part of these financial
        statements                                     

|CONTROLADORA COMERCIAL MEXICANA, S.A. DE C.V.
      AND SUBSIDIARIES                      
|------------------------------------------------------------------------------------------
|CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL
      POSITION                            
|For the Years Ended December 31, 2001, 2000
      and 1999                                
|(In thousands of Mexican pesos of constant
      purchasing power as of Decembre 31, 2001)
|                                                                                          
|Operating activities:                                                                     
|Net income                                                                                
|Items applied to income not requiring the use (providing) of funds:                       
|Depreciation and amortization                                                             
|Provision for deferred taxes                                                              
|Cancellation of the fall in value
      of permanent investment                           
|Labor obligations                                                                         
|Minority interest                                                                         
|                                                                                          
|(Increase) decrease in:                                                                   
|Trade accounts receivable                                                                 
|Inventories                                                                               
|Other accounts and notes receivable                                                       
|Prepaid and other expenses                                                                
|Increase (decrease) in:                                                                   
|Trade payables                                                                            
|Taxes payable                                                                             
|Other accrued liabilities                                                                 
|                                                                                          
|Resources provided by operating activities                                                
|Financing activities:                                                                     
|Bank loans, short-term                                                                    
|Bank loans, long-term                                                                     
|Payment of bonds and bank loans                                                           
|Paid in capital                                                                           
|Minority interest                                                                         
|Dividends paid                                                                            
|Reissuance (acquisition) of units for treasury stock, net                                 
|Units reissuance (repurchased) for stock purchase plan                                    
|Resources used for financing activities                                                   
|Investing activities:                                                                     
|Decrease in permanent investments                                                         
|Acquisitions of property and equipment,                                                   
|Leasehold improvements and other assets                                                   
|Disposition of property and equipment                                                     
|Resources used in investing activities                                                    
|Net (decrese) increase in cash and temporary investments                                  
|Cash and temporary investments at beginning of year                                       
|Cash and temporary investments at end of year                                             
|The accompanying notes are an integral part of these
        financial statements.        

---

1. ORGANIZATION AND BACKGROUND:
  Controladora Comercial Mexicana, S.A. de C.V. (CCM, and together with its consolidated
  subsidiaries, "the Company") was founded as a partnership on January 28, 1944,
  under the name of Antonino González e hijo. On July 1, 1957, it was incorporated
  under the name of Comercial Mexicana; on March 5, 1982, it became a limited
  liability company with variable capital (Sociedad Anónima de Capital Variable).
  On December 9, 1988, the Company changed its name to Controladora Comercial
  Mexicana, S.A. de C.V., and modified its corporate by-laws, effective January
  1, 1989, to enable it to engage in the business of leasing personal property
  and real estate, and investing in companies engaged in the purchase, sale and
  distribution of groceries and general merchandise in the Mexican Republic.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: 
  The principal accounting policies followed by the Company, which are in accordance
  with accounting principles generally accepted in Mexico, are summarized below:

a) Revenue Recognition 
  Revenue from product sales is recognized when the related goods are shipped
  and all significant obligations of the Company have been satisfied.

b) Consolidation 
  The percentage investment in significant subsidiary companies is 99.99%, except
  Costco de Mexico with 50%.

|Subsidiary                            | Activity                                                                 
|------------------------------------- | -------------------------------------------------------------------------
|Comercial Mexicana, S.A. de C.V.      | Operated of a chain of 134 stores (131 in 2000).                         
|Super Mercados, S.A. de C.V.          | Operated of a chain of 18 stores (17 in 2000).                           
|Restaurantes California, S.A. de C.V. | Operated of a chain of 50 restaurants (46 in 2000).                      
|Costco de Mexico, S.A. de C.V.        | Operated of a chain of 20 membership warehouse stores (19 in
      2000).
|Subsidiary real estate companies      | Group of real estate companies.                                          
|Subsidiary service companies          | Group of services companies.                                             

The Company consolidates the accounts of all majority-owned subsidiaries. The
  investment in subsidiary companies and the transactions and balances between
  them have been eliminated from these financial statements.

The Company's investment in the Costco Mexico Group joint venture with Costco
  Corporation, meets the joint control criteria discussed in International
  Accounting Standard No. 31. Accordingly, the Company reports its investment
  under the proportionate consolidation method.

c) Temporary investments 
  Temporary investments are recorded at market value as of the balance sheet date.
  Unrealized gains and losses are included in interest income.

d) Permanent investments 
  Investments in shares for which tenure is estimated to be no longer than one
  year are valued at cost restated using the National Consumer Price Index (NCPI).

e) Inventories 
  Inventories are stated at cost, principally using the retail method, which is
  equivalent to replacement cost.

f) Cost of sales 
  Since the retail method was used to value inventories and due to the high inventory
  turnover, the cost of sales is considered restated.

g) Property, equipment and leasehold improvements 
  The Company restates the amounts of property, equipment and leasehold improvements
  according to changes in the NCPI, in compliance with the Bulletin B-10 and its
  amendments. Long-lived assets are reviewed for impairment whenever events or
  changes in circumstances indicate that the carrying amount of an asset may not
  be recoverable.

h) Depreciation and amortization 
  Depreciation of property and equipment and amortization of leasehold improvements,
  is based on its restated cost and calculated through the straight-line method,
  applying annual rates appropriate for absorbing the original cost of assets,
  as well as their restatement within the useful life of the asset.

The depreciation rates used are a follows:

|                       | 2001   | 2000  
|---------------------- | ------ | ------
|Building               | 2%     | 2%    
|Store fixtures         | 9%     | 9%    
|Leasehold improvements | 5%     | 5%    
|Other assets           | 9%-20% | 9%-20%

i) Pre-opening costs 
  Costs associated with the opening of new stores are recorded to income during
  the same fiscal year in which such stores start-up operations .

j) Stock purchase plan 
  The Company has established a stock purchase plan in which the Company purchases
  its own units and grants key personnel the right to purchase units on an installment
  basis. The units are sold to employees at the fair market value on the day granted.
  The employees pay for their stock purchases ratably over a nine-year period.
  Accounts receivable from employees for the short-term purchase of units are
  recorded as other accounts and notes receivable. On the other hand, those maturing
  longer than a year are recorded under other assets. Additionally at December
  31,2001, the Company has established a long-term stock option plan. The
  short-term and long-term units assigned to employees at that date amount approximately
  to 45,607,000.

k) Income taxes and deferred income taxes 
  The Company recognizes the deferred income tax through the comprehensive asset
  and liability method, in accordance with the guidelines of amended Bulletin
  D-4 "Accounting Treatment of Income Tax, Assets Tax and Employee Profit sharing",
  issued by the Mexican Institute of Public Accountants ("MIPA") which consists
  in determining said tax by applying the corresponding income tax rate to the
  temporary differences between the book and tax values of assets and liabilities
  at the date of the financial statements.The accrued effect of this accounting
  change, effective January 1, 2000, originated a net increase in the deferred
  tax liability, and a reduction of stockholders' equity by the same amount. (See
  Note 15).

l) Labor obligations 
  Trust funds have been established to cover the obligations for seniority premiums
  determined by Federal Labor Law and a pension plan for employees has been established
  at December 31, 2001 in one of the subsidiaries. Liabilities related to such
  obligation were determined based on actuarial calculation. (See Note 16).

m) Foreign currency transactions 
  Transactions denominated in foreign currencies are recorded at the exchange
  rates in effect on the dates the transactions are closed. Assets and liabilities
  in foreign currencies are stated in Mexican pesos at the rates of exchange in
  effect as of the balance sheet date. The differences resulting from fluctuations
  in the exchange rates between the dates of closing transactions and their settlement
  of valuation at year-end are applied to the integral results of financing.

n) Financial instruments 
  Effective January 1, 2001 the Company adopted the provisions established by
  Bulletin C-2 "Financial Instruments", issued by the Mexican Institute of Public
  Accountants ("MIPA"), which provides the guidance for recognizing, measuring
  and disclosing information about financial assets and liabilities, including
  the accounting for certain hedge transactions. Bulletin C-2 requires that all
  financial instruments be recorded in the balance sheet at their fair value and
  changes in the fair value of financial instruments are recorded in each period
  in the income statement.

The Company uses derivative financial instruments for the purpose of reducing
  its exposure to adverse fluctuations in foreign exchange rates. Unrealized gains
  or losses from outstanding foreign currency forward contracts are not material.

o) Comprehensive income 
  As of January 1, 2001, Bulletin B-4 "Comprehensive Income", entered into effect.
  This Bulletin requires that the various items making up the capital gains (losses)
  during the year be shown in the statement of changes in stockholders equity
  under the concept "comprehensive income".For comparative purpose the statement
  of changes in stockholders' equity for the years 2000 and 1999 were restructured.

p) Use of estimates 
  The preparation of the financial statements in conformity with generally accepted
  accounting principles, requires Management to make estimates that affect the
  reported amounts of assets and liabilities and disclosure of contingent assets
  and liabilities at the dates of the financial statements and the reported amounts
  of revenues and expenses during the reporting periods. Therefore, actual results
  could differ from those estimates.

q) New accounting standards 
  In December 2001 the MIPA issued revised Statement C-9, "Liabilities, Provisions,
  Contingent Assets and Liabitilties and Commitments", which supersedes the original
  Statements C-9 and C-12, both from 1974, and Circulars 46, 47 and 48. The provisions
  of this new Statement are effective for years beginning on or after January
  1, 2003; however, early adoption is recommended.

The objective of this Statement is to establish rules for valuation and disclosure
  of liabilities and provisions, to determine particular rules for valuation and
  disclosure of contingent assets and liabilities, and to provide rules for disclosure
  of commitments acquired by an entity as a part of its normal activities.

In February 2002, the MIPA issued revised Statement C-8, "Intangible Assets",
  which supersedes the current Statement C-8, effective since 1976. The provisions
  of this new Statement are effective for years commencing on or after January
  1, 2003; however, early adoption is recommended.

The significant provisions of this Statement are: (i) it establishes rules
  and criteria for accounting for research and development costs; (ii) preoperating
  costs identified with research and development activities are charged to expenses;
  and (iii) valuation rules are based on a logical sequence of the assets' useful
  life, considering initial recognition and valuation of the intangible asset,
  recognition of an expense, additional payments and valuation after the initial
  recognition.

3. EFFECTS OF INFLATION ON THE FINANCIAL STATEMENTS:

The consolidated financial statements of the Company have been prepared in
  accordance with Bulletin B-10, "Recognition of the Effects of Inflation on Financial
  Information," as amended, issued by the MIPA. The financial statements have
  been presented in pesos of constant purchasing power as of December 31, 2001
  to be comparable to financial information as of that date, as follows:

The balance sheets have been restated at constant pesos as of December 31,
  2001 using the National Consumer Price Index ("NCPI") as of that date.

The statements of income have been restated at constant pesos as of December
  31, 2001 using the NCPI for the month in which the transactions were executed.

NCPI used to restate prior years financial statements are follows:

|     | Inflation for the period | Cumulative inflation as for December 31, 2001
|---- | ------------------------ | ---------------------------------------------
|1999 | 12.32%                   | 27.77%                                       
|2000 | 8.96%                    | 13.76%                                       
|2001 | 4.40%                    | 4.40%                                        

The followings items are the result of the recognition of the effects of inflation
  on the financial information.

Capital stock and earned capital
  The capital stock and accumulated results accounts include the effect of restatement,
  determined by applying the NCPI factor for the applicable year. The restatement
  represents the amount required to maintain the contributions and earned capital
  in pesos of constant purchasing power as of December 31, 2001.

Result from holding non-monetary assets
  Result from holding non-monetary assets, generated mainly by inventories and,
  until December 31, 1996, fixed assets, represents the decrease of non-monetary
  assets, restated through the specific cost method with respect to the restated
  value of such assets using the NCPI.

Gain from monetary position
  The gain from monetary position represents the effects of inflation, as measured
  by the NCPI, on the Company's monetary assets and liabilities at the beginning
  of each month and is restated at the end of the year. This effect is included
  in integral result of financing in the accompanying consolidated statements
  of income.

4. INVESTMENTS:

The Company's investments consist of the following at December 31:

|                            | 2001       | 2000      
|--------------------------- | ---------- | ----------
|Temporary:                  |            |           
|Fixed-income investments    | Ps 761,602 | Ps 621,450
|Permanent:                  |            |           
|Equity investments, net (1) | -          | Ps 108,200

(1) During 2001, the Company sold the entirety of its investments and recognized
  a gain of Ps 58,273.

5. OTHER ACCOUNTS AND NOTES RECEIVABLE:

At December 31, other accounts and notes receivable consist of the following:

|                                            | 2001       | 2000      
|------------------------------------------- | ---------- | ----------
|Lease receivables                           | Ps 5,629   | Ps 9,001  
|Receivables from employees (1)              | 36,681     | 25,978    
|Value- added tax and other taxes receivable | 407,943    | 384,895   
|Others                                      | 174,637    | 134,870   
|                                            | Ps 624,890 | Ps 554,744

(1) Primarily receivables arising from installment sales under the employees
  stock purchase plan. The non-current portion of receivables from the stock purchase
  plan amounts Ps 109,694 and Ps 89,486 in 2001 and 2000, respectively, and are
  included in other assets.

6. RELATED PARTIES:

The Company's majority shareholders own a controlling interest in Nova Distex,
  S.A. de C.V. (Nova Distex), a textile manufacturer and property management company.
  The Company provides management services to Nova Distex and purchases textiles
  for resale in its stores.

The following table summarizes the amounts recorded in the Company's accounts,
  which relate to transactions with Nova Distex .

|                                    | 2001      | 2000      | 1999     
|----------------------------------- | --------- | --------- | ---------
|Purchases                           | Ps 80,939 | Ps 89,876 | Ps 96,137
|Purchase of fixed assets and others | 6,620     | 43,452    | 37,807   
|                                   
|Accounts receivables                | -         | 7,564     | 9,980    

7. PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS:

Property, equipment and leasehold improvements consist of the following at
  December 31:

|                                                                         | 2001          | 2000         
|------------------------------------------------------------------------ | ------------- | -------------
|Buildings                                                                | Ps 5,811,705  | Ps 5,685,348 
|Store fixtures                                                           | 3,317,472     | 3,017,659    
|Electronic equipment                                                     | 801,046       | 790,547      
|Office fixtures                                                          | 82,753        | 95,524       
|Machinery and equipment                                                  | 259,338       | 268,430      
|Leasehold improvements                                                   | 1,715,430     | 1,607,468    
|                                                                         | 11,987,744    | 11,464,976   
|Less: accumulated depreciation and amortization                          | 4,623,696     | 4,105,240    
|                                                                         | 7,364,048     | 7,359,736    
|Land                                                                     | 7,064,565     | 6,762,345    
|Construction in progress and advances for purchase of fixed
      assets | 130,519       | 97,822       
|                                                                         | Ps 14,559,132 | Ps 14,219,903

Depreciation expense amounted to Ps 683,156, Ps 642,405 and Ps 571,273, for
  the years ended December 31, 2001, 2000 and 1999, respectively.

8. DEBT:

Total debt as of December 31, consists of the following obligations:

|                                                                                                                                                                 | 2001         | 2000        
|---------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------ | ------------
|Unsecured notes of US $ 100 million maturing in 2005, at a
      fixed interest rate of 9.375% payable semi-annually. (1)                                        | Ps 916,000   | Ps 1,007,460
|Forward agreement of US$20 million maturing in 2005 (2)                                                                                                          | 30,830       |             
|Direct loan of US$30 million, maturing semi-annually from June
      2003 to December 2004, at a fixed interest rate libor plus 1.75 payable
      semi-annually | 274,800      |             
|Forward agreement of US$30 million maturing in 2002 (3)                                                                                                          | 8,897        |             
|Debenture bonds of 172.9 million Investment Units (UDI's) Maturing
      in 2010 at a fixed interest rate of 8%, payable semi-annually.(4                        | 528,257      | 525,125     
|Direct loan of 90 million Investment Units (UDI's) maturing
      in 2002 at a fixed interest are of 9.10% (5)                                                   |              | 273,344     
|                                                                                                                                                                 | 1,758,784    | 1,805,929   
|Less:                                                                                                                                                            |              |             
|Short-term forward contract                                                                                                                                      | 8,897        | -           
|Total long-term debt                                                                                                                                             | Ps 1,749,887 | Ps 1,805,929

(1) In April 1998, the Company issued US$130 million Series B unregistered
  bonds at a fixed interest rate of 9.375% . Interest on this bond is payable
  semi-annually in April and October of every year beginning October 1998. Beginning
  April 2003, the Company has the option to repurchase these bonds, partially
  or fully, at 104.5% of their nominal value, and 102.25% twelve months after
  that date. The agreement for this bond has certain covenants that, among other
  things, limit the ability of the Company and its Restricted Subsidiaries (as
  defined) to: (i) incur additional indebtedness; (ii) make certain restricted
  payments (iii) allow restrictions on distributions from Restricted Subsidiaries;
  (iv) incur liens; (v) enter into certain transactions with affiliates; (vi)
  sell, assign, transfer, lease, convey or otherwise dispose of all or substantially
  all of the assets of the Company; (vii) enter into sale and leaseback transactions;
  (viii) issue capital stock of its Restricted Subsidiaries; and (ix) merge or
  consolidate with any other entity. Additionally the Company will be required
  to make an offer to purchase the Notes at a price equal to 100% of the principal
  amount thereof, plus accrued and unpaid interest to the date of the purchase
  with the proceeds of certain asset sales. During 2000 and 1999, the Company
  repurchased US$ 1.5, and US$ 2.5 million Notes (fair value), which were cancelled
  in 2000 and 1999, respectively. 
  (2) On February 28, 2001 the Company renegotiated the forward agreement for
  US$20 million effective from March 1, 2001 to April 14, 2005, binding itself
  to pay the equivalent amount in Mexican pesos, at 74,004,278 Investment Units
  (UDI's). 
  (3) In December 2001, the Company entered into a forward contract for US$30
  million at the exchange rate of Ps9.85 per dollar, effective from December 3,
  2001 to December 27, 2002. Said liability shall be cancelled if the exchange
  rate exceeds the amounts of Ps11.25 per dollar during the term of the contract.
  
  (4) In December 2000, the Company subscribed a program of debentures in an amount
  up to Ps 1.5 billion. The Company further issued 1,729,000 debenture bonds with
  a face value of 100 Investment Units (UDI's) each and amounts to an equivalent
  of 172.9 million Investment Units (UDI's) over a ten year term with a fixed
  interest rate of 8.45%, plus the increase in the NCPI issued by Banco de Mexico
  in the value of each UDI. Interest accrued on the debenture bonds will be liquidated
  every semester on the eighth of June and December every year. The contract has
  certain financial restrictive convenants that limit the ability of the Company
  and its subsidiaries (as defined): (i) limit to acquire additional debt; (ii)
  limitations on encumbrances; (iii) conditions for mergers, spin-offs or sale
  of assets; (iv) limitation on dividends paid; (v) maintaining a certain degree
  of priority (guarantee). 
  (5) In October 1999, a debt in dollars was refinanced with a direct loan of
  Investment Units (UDI's), considered at a fixed annual interest rate of 11.60%
  plus the NCPI increase in the value of each UDI, an index issued by Banco de
  Mexico. Interest was payable monthly. On December 2000, the Company made a partial
  payment in the amount of 40 million Investment Units (UDI's) and restructured
  the remaining debt by reducing the interest rate to 9.10%.The Company settled
  this loan in advance in March 2001.

At December 31, 2001 and 2000, the Company had an aggregate of over Ps 4,427
  million and Ps 2,964 million respectively of credit available through unused
  uncommitted lines of credit with ten banking institutions in 2001 and nine in
  2000, under which the Company may borrow in pesos or, at its option, in U.S.
  dollars (converted to pesos at the exchange rate in effect at the time of the
  borrowing). The terms and conditions of such lines of credit will be determined
  at the time when they are utilized. The Company renews its bank lines of credit
  on a yearly basis. The bank credit lines do not contain any financial covenants.

During 2001, 2000 and 1999, the Company paid Ps 158,113, Ps 177,264 and Ps
  203,335, respectively, of interest on debt.

9. LEASES:

The Company leases certain retail locations, warehouse and distribution space
  under operating leases. Some leases require that the fixed portion of the rent
  be negotiated annually. Certain leases also provide for contingent rentals based
  on the sales revenue of the individual stores or restaurants. As leases expire,
  it can be expected that in the normal course of business, they will be renewed
  or replaced.

Total rent expense for operating leases for each of the three years ended December
  31, is as follows:

|                   | 2001       | 2000       | 1999      
|------------------ | ---------- | ---------- | ----------
|Base rent          | Ps 180,781 | Ps 150,602 | Ps 133,519
|Contingent rent    | 93,849     | 109,420    | 116,597   
|Total rent expense | Ps 274,630 | Ps 260,022 | Ps 250,116

Minimum rental commitments under non-cancelable operating leases at December
  31, 2001, are as follows:

|                    | Amount      
|------------------- | ------------
|2002                | Ps 180,781  
|2003                | 180,781     
|2004                | 180,781     
|2005                | 180,781     
|2006 and thereafter | 380,592     
|                    | Ps 1,103,716

10. SOCIAL WELFARE:

An irrevocable trust fund has been set up for voluntary retirement, death,
  permanent total disability, hospital medical services and disability payments
  to which administrative employees are entitled in accordance with the rules
  of the plan established for that purpose. The Company makes contributions of
  between 20% and 24% of the principal employees' salaries to the trust. The Company
  has no obligation to the employees for benefits in addition to the contributions
  made. The trust maintains the plan and handles all payments made to the employees
  covered under the plan. During the years ended December 31, 2001, 2000 and 1999,
  contributions were made amounting to Ps 215,582, Ps 198,165 and Ps 191,169,respectively.

11. CAPITAL STOCK:

The authorized capital stock is comprised of 1,086,000,000 B and BC related
  units with no stated value. At December 31, 2001, subscribed and paid B and
  BC units are 747,711,639 and 338,288,361, respectively (747,774,339 and 338,225,661,
  respectively in 2000).

The nominal capital stock, with Ps1,737,600 stated value, consists of Ps298,258
  cash contributions, Ps909,632 of capitalized profits and Ps529,710 of capitalized
  effects of restatement.

At the General Ordinary Stockholders' Meeting held on March 31, 1992, a resolution
  was passed approving the creation of a reserve for the temporary repurchase
  for the purposes of acquiring the Company's shares. Later on, at the General
  Ordinary Stockholders' Meeting held on April 5, 2001 it was approved to increase
  this reserve up to Ps500,000. The amount of this reserve fluctuates as the Company
  purchases and sales its own shares in the stock market. During 2001 and 2000,
  transactions were held in the net amounts of Ps174,473 and (Ps200,913), respectively,
  against this reserve.

12. STOCK PURCHASE PLAN:

The Company has a stock purchase plan under which key employees are granted
  rights to purchase the Company's common stock at no less than 100% of the market
  price on the date the options are granted. The rights vest equally over a five-year.
  Beginning in 1999, this term was extended for four additional years. Employees
  selected to participate in the stock purchase plan have the right to receive
  the fair value appreciation of their allocated units in lieu of exercising their
  purchase privileges on the planned anniversary dates.

At December 31, 2001 there were not units available for granting to employees.
  At December 31, 2000 and 1999, 1,095,164, and 742,376 BC units respectively
  were available for granting to employees. These units have been repurchased
  by the Company and placed in a trust.

A summary of changes in the stock purchase plan during 2001, 2000 and 1999,
  is as follows:

|                                                         | Number of Units | Weighted Average Exercise Price
|-------------------------------------------------------- | --------------- | -------------------------------
|Outstanding at January 1, 1999                           | 12,461,344      | Ps 5.00                        
|Granted                                                  | 3,678,820       | 9.37                           
|Exercised                                                | (1,196,935)     | 9.76                           
|Cancelled                                                | (613,243)       | 5.00                           
|Outstanding at December 31, 1999                         | 14,329,986      | Ps 6.10                        
|Granted                                                  | 4,558,785       | 8.29                           
|Exercised                                                | ( 1,360,426)    | 10.85                          
|Cancelled                                                | (1,006,510)     | 6.55                           
|Outstanding at December 31, 2000                         | 16,521,835      | Ps 6.77                        
|Granted                                                  | 6,329,495       | 7.49                           
|Exercised                                                | (977,794)       | 8.17                           
|Cancelled                                                | (1,108,104)     | 7.78                           
|Outstanding (held by 318 employees) at December 31, 2001 | 20,765,432      | Ps 7.05                        
|Units exercisable at:                                    |                 |                                
|December 31, 1999                                        | 2,193,747       | Ps 5.19                        
|December 31, 2000                                        | 3,525,840       | Ps 5.37                        
|December 31, 2001                                        | 5,340,040       | Ps 5.60                        

Outstanding stock options at December 31, 2001, are as follows:

|                    | Outstanding | Exercisable    
|------------------- | ----------- | ---------------
|Exercise PriceRange | BC Units    | AverageLife (a)
|
|Ps 3.54-5.00        | 7,408,020   | 4.53           
|7.00-9.58           | 13,357,412  | 7.70           
|Total               | 20,765,432  | 6.57           

(a) Average contractual life remaining in years

Outstanding stock options at December 31, 2000, are as follows:

|                    | Outstanding | Exercisable    
|------------------- | ----------- | ---------------
|Exercise PriceRange | BC Units    | AverageLife (a)
|Ps 3.54-5.00        | 8,750,449   | 5.47           
|8.00-9.58           | 7,771,386   | 8.13           
|Total               | 16,521,835  | 6.72           

(a) Average contractual life remaining in years

Additionally, during 2001 the Company has established a long-term option
  plan of units to key personnel, which purchase his/her own units grants under
  certain circumstances.This units are sold to employees at the fair market value
  on the day granted; at December 31, 2001, 24,841,534 units were granted to employees
  at the exercise price of Ps 6.13.

13. EARNED CAPITAL:

Retained earnings
  In accordance with the Mexican law, legal appropriations (legal reserve) must
  be increased by at least 5% of annual net profits until they reach 20% of the
  contributed capital amount. The appropriated earnings are not available for
  dividends, but may be used to reduce a deficit or may be transferred to stated
  capital. Other appropriations of profits require a vote of the shareholders.

Dividends paid will be free of income tax if paid out of the Net Taxable Income
  Account (CUFIN). A 35% rate will be paid on the amount exceeding the balance
  of the CUFIN by multiplying the dividend paid by the 1.5385 factor. The applicable
  tax will be payable by the Company, and it may be credited against income tax
  the Company is subject to, in the following three fiscal year. Dividends paid
  will not be subject to any tax withholding.

At December 31, 2001, cumulative earnings that have been subject to income
  tax and can be distributed by the Company free of Mexican withholding tax were
  approximately Ps 79,946.

Comprehensive income 
  Comprehensive income for the years ended December 31,2001, 2000 and 1999, is
  analyzed as follows:

|                                                    | 2001       | 2000         | 1999        
|--------------------------------------------------- | ---------- | ------------ | ------------
|Net income for the year                             | Ps 759,250 | Ps 1,150,784 | Ps 1,428,359
|Result from holding nonmonetary assets for the year | (227,321)  | (292,986)    | (360,507)   
|                                                    | Ps 531,929 | Ps 857,798   | Ps 1,067,852

14. FOREIGN CURRENCY POSITION:

The foreign currency position as of December 31, is as follows:

|                           |              |             |             | Year-end          
|-------------------------- | ------------ | ----------- | ----------- | ------------------
|                           |              |             |             | Exchange Rates (1)
|                           | 2001         | 2000        | 2000        | 2001              
|Assets:                    |              |             |             |                   
|US Dollars:                |              |             |             |                   
|Investments in securities  | Ps 212,448   | US$ 23,193  | US$ 11,983  | Ps 9.16           
|Liabilities:               |              |             |             |                   
|US Dollars:                |              |             |             |                   
|Debt and other liabilities | Ps 1,423,244 | US$ 155,376 | US$ 121,482 | Ps 9.16           

(1) In pesos per US dollar. The assets and liabilities denominated in foreign
  currency are translated in the financial statements at the exchange rates mentioned
  above.

As of December 31, 2001 and 2000, the Company and its subsidiaries had foreign
  non-monetary assets or whose replacement cost is determined in foreign currency,
  as detailed below:

|                   | 2001       | 2001       | 2000      
|------------------ | ---------- | ---------- | ----------
|Computer equipment | Ps 521,433 | US$ 56,925 | US$ 51,360
|Inventories        | 220,875    | 24,113     | 18,932    
|                   | Ps 742,308 | US$ 81,038 | Us$ 70,292

Other transactions carried out in US dollars, for the years ended December
  31, are summarized below:

|                                            | 2001         | 2001        | 2000       
|------------------------------------------- | ------------ | ----------- | -----------
|Net export and import of goods and services | Ps 1,550,440 | US$ 169,262 | US$ 126,409
|Technical advice                            | 15,087       | 1,647       | 1,688      
|Interest payments                           | 100,394      | 10,960      | 12,274     
|                                            | Ps 1,665,921 | US$ 181,869 | US$ 140,371

As of March 1, 2002, issuance date of the independent auditors report, the
  US dollar exchange rate is Ps 9.0965 per US dollar as published by brokerage
  houses.

15. INCOME TAX:

At December 31, 2001, 2000 and 1999, income tax and employees' profit sharing
  provision are summarized as shown below:

|                                                                                            | 2001       | 2000      | 1999      
|------------------------------------------------------------------------------------------- | ---------- | --------- | ----------
|Income tax due                                                                              | Ps 14,221  | Ps 10,742 | Ps 7,195  
|Deferred income tax                                                                         | 311,117    | 136,337   | -         
|Assets tax                                                                                  | 23,763     | 125,522   | 144,406   
|Employees statutory profit sharing                                                          | 1,580      | 12,093    | 7,8023    
|Gain on monetary position through the initial deferred
                   income tax effect | (98,305)   | (206,584) | -         
|                                                                                            | Ps 252,376 | Ps 78,110 | Ps 159,403

For both Mexican and US GAAP purposes, the financial statement carrying amounts
  utilized in the determination of the deferred tax assets and liabilities include
  the inflation adjustment described in Note 3, and their respective tax bases
  also include the effects of inflation based on tax regulations.

The Company from 1989 obtained authorization from the Mexican Treasury Department
  to consolidate its tax result with those of its controlled companies.

As of December 31, 2001, the Company had consolidated losses for tax purposes
  amounting approximately Ps 486,106, which will reduce consolidated taxable income
  in future years until 2011. In addition, the Company has operating loss carryforwards,
  which have been generated by subsidiary companies prior to their inclusion in
  the consolidated income tax calculation. Accordingly, the individual subsidiary
  companies must generate taxable income for the group to utilize such losses.

The assets tax paid may be utilized as a credit against future income taxes
  during the years in which the Company generates an income tax in excess of the
  assets tax. The assets tax is available as a carryforward for up to ten years
  and is subject to restatement based on the NCPI when utilized. As of December
  31, 2001 the assets tax is available as a tax loss carryforward in the amount
  of Ps 476,189 and expires in the years 2004 to 2011.

At December 31, the main temporary differences on which deferred income tax
  is recognized are summarized as shown below:

|                               | 2001            | 2000            
|------------------------------ | --------------- | ----------------
|Inventories                    | Ps ( 1,353,634) | Ps ( 11,425,548)
|Fixed assetsVacation provision | ( 1,874,426)    | ( 1,867,419)    
|Other net                      | 682,730         | 960,449         
|                               |                 |                 
|Deferred income tax payable    | Ps (2,545,330)  | Ps ( 2,332,518) 

As a result of the amendments to the income Tax Law approved on January 1,
  2002, beginning in 2003, the income tax rate (35%) will be reduced annually
  to a nominal of rate of 32% in 2005.Consequently, the effect of this gradual
  decrease in the income tax is a reduction of deferred income tax liabilities
  by Ps 258,987 in 2002 thereby increasing the net income in the same amount.

The following is a reconciliation of the statutory income tax rate of the actual
  effective income tax rate for the year ended December 31:

|                                                              | 2001  | 2000   | 1999  
|------------------------------------------------------------- | ----- | ------ | ------
|Income tax computed at statutory tax rate                     | 35%   | 35%    | 35%   
|Depreciation and amortization                                 | 2%    | 18%    | (1%)  
|Inventories                                                   | (1%)  | (42%)  | (46%) 
|Inflationary interest adjustment and net monetary gain (B-10) | (6%)  | (16%)  | 1%    
|Provisions                                                    | 13%   | 5%     | 4%    
|Other                                                         | 3%    | ( 20%) | ( 11%)
|Tax loss carryforwards                                        | (24%) | 15%    | 19%   
|Provision for income tax and deferred tax                     | 22%   | (5%)   | 1%    

16. LABOR OBLIGATIONS:

Under Federal Labor Law in Mexico, the Company is liable for payments to employees
  terminated under certain circumstances. In the Company's main subsidiaries,
  trust funds have been established to cover incurred and contingent obligations
  for seniority premiums that are derived from the application of Federal Labor
  Law.

The cost of these seniority premiums and pension plan is computed based on
  actuarial calculations using the projected unit credit method. This method establishes
  the procedures for measuring the expenses and liabilities for the pension plan
  and seniority premiums.

The net cost of this period amounted to Ps 17,444, Ps 18,991 and Ps 8,801 in
  2001, 2000 and 1999, respectively.

The amounts of projected benefits for labor obligations at December 31, 2001
  and 2000 (See Note 2I) are as follows:

|                                                                                       | 2001         | 2000        
|-------------------------------------------------------------------------------------- | ------------ | ------------
|Accumulated benefit obligation                                                         | Ps (114,352) | Ps ( 53,720)
|Additional projected benefits                                                          | (20,499)     | ( 921)      
|Projected benefit obligation                                                           | (134,851)    | ( 54,641)   
|Less:                                                                                  |              |             
|Plan assets                                                                            | 27,721       | 15,163      
|                                                                                       |              |             
|Projected benefit obligation in excess of plan assets                                  | (107,130)    | ( 39,478)   
|Net transition assets, changes in assumption and adjustments
      based on experience | ( 9,061)     | ( 13,755)   
|Accrued liabilities                                                                    | Ps (116,191) | Ps ( 53,233)

17. SEGMENT INFORMATION:

Business segments integrating the Company are revealed in compliance with revised
  International Accounting Standard No14, "Segment Information".

The Company's main activity is the operation of supermarkets and mass merchandising
  store in Mexico.

The Company operates in three segments: (1) the CCM Group, which includes the
Comercial Mexicana, Bodega and Mega supermarkets, and comprises our core business (2)
the Costco Mexico Group, which operates Costco Mexico, our joint venture with Costco
Companies, Inc., and (3) the Other Group, which includes Restaurantes California and
our Sumesa stores. These segments consider organizational structures, administration
and financial information separate from the rest the group when decisions are taken.

The balances corresponding to segment information as of December 31, are shown
  below:

|                                | Self-service  | Joint venture and others
|------------------------------- | ------------- | ------------------------
|                                | 2001          | 2000                    
|Revenue from external customers | Ps 26,620,528 | Ps 27,222,574           
|Depreciation and amortization   | 577,840       | 564,408                 
|Net income                      | 590,650       | 930,308                 
|Long-term assets                | 12,693,035    | 12,754,305              
|Material liabilities            | 4,305,437     | 5,002,588               
|Capital expenditures            | 861,775       | 994,344                 

18. DIFFERENCES BETWEEN MEXICAN GAAP AND U.S. GAAP:

The Company's consolidated financial statements are prepared in accordance
  with Mexican GAAP, which differ in certain significant respects from U.S. GAAP.

The reconciliation to U.S. GAAP does not include the reversal of the adjustments
  to the financial statement for the effects of inflation required under Bulletin
  B-10 and Mexican National Banking and Securities Commission ("CNBV") requirements,
  as amended. The application of Bulletin B-10 represents a comprehensive measure
  of the effects of price level changes in the inflationary Mexican economy and,
  as such, is considered a more meaningful presentation than historical cost-based
  financial reporting for both Mexican and U.S. accounting purposes. The application
  of Bulletin B-10 to the U.S. GAAP adjustments follows the methodology discussed
  in Note 3.

The principal differences other than inflation accounting, between Mexican
  GAAP and U.S. GAAP are presented below together with an explanation, where appropriate,
  of the adjustments that affect the determination of the consolidated results
  of operations (net of effects of minority interest), for each of the three years
  in the period ended December 31, 2001, 2000 and 1999 and stockholders' equity
  at December 31, 2001 and 2000.

Reconciliation of Net Income
  Net income is reconciled as follows:

|Year ended December 31,                                
|-------------------------------------------------------
|                                                       
|Net income reported under Mexican GAAP                 
|U.S. GAAP adjustments:                                 
|Deferred income taxes                                  
|Deferred employee profit sharing                       
|Gain of repurchase of Senior Notes                     
|Seniority premiums                                     
|Unrealized (loss) gain on valuation of investments     
|Compensation gain (expense) from stock purchase plan   
|Impact of U.S. GAAP adjustments on minority interest   
|Equity in (losses) earnings of affiliates              
|Effect of inflation accounting on U.S. GAAP Adjustments
|Total U.S. GAAP adjustments                            
|Net income before extraordinary items under U.S. GAAP  
|Extraordinary item- gain on repurchase of notes        
|Net income under U.S. GAAP                             
|Weighted average units outstanding (thousands)         
|Outstanding units under stock purchase plans           
|Diluted weighted average units outstanding (thousands) 
|Basic income per unit before extraordinary item        
|Basic income per unit per extraordinary item           
|Basic income per unit under U.S. GAAP                  
|Diluted net income per unit under U.S. GAAP            

Comprehensive Income
  Statement of Financial Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive
  Income" establishes rules for the reporting of comprehensive income and its
  components. Comprehensive income includes net income, loss from holding non-monetary
  assets and unrealized gains (losses) of available for sale securities, net.
  The following table summarizes the components of comprehensive income under
  U.S. GAAP for the years ended December 31, 2001, 2000 and 1999.

|Year ended December 31,                               
|------------------------------------------------------
|                                                      
|Net income                                            
|Loss from holding non-monetary assets                 
|Unrealized gains of available for sale securities, net
|Comprehensive income                                  
|Accumulated comprehensive income at end of year       

Reconciliation of Stockholders' Equity

Stockholder's equity is reconciled as
  follows:

|                                                      |    | December 31, 
|----------------------------------------------------- | -- | -------------
|                                                      |    | 2001         
|Stockholders' equity under Mexican GAAP               |    | Ps 10,826,274
|Approximate U.S. GAAP adjustments:                    |    |              
|Minority interest                                     | f. | ( 83,122)    
|Impact of U.S. GAAP adjustments on minority interests |    | 664          
|Deferred income taxes                                 | a. | 28,304       
|Deferred employee profit sharing                      | a. | -            
|Accrued seniority premium cost                        | c. | -            
|Equity in earnings of affiliates                      | g. | ( 42,473)    
|Unrealized gain on valuation of investments           | h. | -            
|Accrued liability under stock purchase plan           | d. | ( 18,115)    
|Receivable under stock purchase plan                  | d. | ( 301,565)   
|Total U.S. GAAP adjustments                           |    | ( 416,307)   
|Stockholders' equity under U.S. GAAP                  |    | Ps 10,409,967

Analysis of changes in Stockholders' Equity under U.S. GAAP

|                                                       | 2001          | 2000         
|------------------------------------------------------ | ------------- | -------------
|Stockholders' equity at beginning of year              | Ps 10,041,107 | Ps 9,437,010 
|Net income                                             | 833,273       | 1,248,895    
|Dividends paid                                         | ( 116,255)    | ( 109,812)   
|Reissuance of shares for stock                         |               |              
|purchase plan, net                                     | 6,575         | (557)        
|(Repurchase) reissuance of treasury stock              | 91,074        | (200,913)    
|Loss from holding non-monetary assets                  | ( 247,403)    | ( 349,857)   
|Change in receivable under stock purchase plan         | ( 184,845)    | ( 17,260)    
|Payments to employees under stock purchase plan        | 1,955         | 9,067        
|Change in unrealized gains on valuation of Investments | ( 15,514)     | 24,534       
|Stockholders' equity at end of year                    | Ps 10,409,967 | Ps 10,041,107

a. Deferred Income Taxes and Employee Profit Sharing
  Prior to December 31,1999, Under Mexican GAAP, deferred taxes are provided only
  for the identifiable, non-recurring temporary differences, (i.e., those that
  are expected to reverse over a definite period of time). Effective January 1,
  2000, the Company adopted the provisions of the revised Bulletin D-4, "Accounting
  Treatment of Income Tax, Asset Tax, and Employee Profit Sharing". The new D-4
  changes the accounting treatment from the partial liability method to the full
  asset and liability method, requiring the recognition of the deferred tax effects
  for the temporary differences between accounting and tax values of assets and
  liabilities. For U.S. GAAP purposes, in 1991 the Company adopted SFAS No. 109,
  "Accounting for Income Taxes," ("SFAS 109") which requires an asset and liability
  method of accounting for income taxes. Under the asset and liability method,
  deferred income taxes are recognized for the tax consequences of all temporary
  differences, both recurring and non-recurring, between the financial statement
  carrying amounts and the tax basis of existing assets and liabilities. Under
  SFAS 109, the effect on deferred taxes of a change in tax rates is recognized
  in income in the period that includes the enactment date.

The primary components of net deferred tax liability under U.S. GAAP consists
  of the following at December 31:

|                                    | 2001                                         | 2000                                         
|----------------------------------- | -------------------------------------------- | ---------------------------------------------
|                                    | SFAS No.109 Applied to Mexican GAAP Balances | SFAS No. 109 Applied to U.S. GAAP Adjustments
|Deferred income taxes:              |                                              |                                              
|Short-term:                         |                                              |                                              
|Inventories                         | Ps (1,162,090)                               | Ps -                                         
|Accrued vacations                   | 10,667                                       | -                                            
|Tax loss carryforwards              | 83,279                                       | -                                            
|Prepaid expenses                    | (15,045)                                     | -                                            
|Total short-term                    | (1,083,189)                                  | -                                            
|Long-term:                          |                                              |                                              
|Fixed assets                        | (1,768,560)                                  | -                                            
|Equity investments                  | -                                            | (161,101)                                    
|Seniority premiums                  | 19,602                                       | -                                            
|Permanent investments               | -                                            | -                                            
|Tax loss carryforwards              | -                                            | -                                            
|Asset tax credit carryforwards      | 476,180                                      | -                                            
|Total long-term                     | (1,272,778)                                  | (161,101)                                    
|                                    | (2,355,967)                                  | (161,101)                                    
|Less valuation allowance            | -                                            | -                                            
|Net deferred income tax liabilities | Ps (2,355,967)                               | Ps (161,101 )                                

For the year ended December 31, 2001, the difference in net deferred tax liabilities
  between Mexican and US GAAP was as follows:

|                        | Mexican GAAP    | U.S GAAP        | Difference 
|----------------------- | --------------- | --------------- | -----------
|Deferred tax liability: |                 |                 |            
|At December 31, 2000    | Ps ( 2,332,518) | Ps ( 2,379,456) | Ps (46,938)
|At December 31, 2001    | (2,545,330)     | (2,517,068)     | 28,262     
|Net Change              | Ps (212,812)    | Ps (137,612)    | Ps 75,200  

|                        | Mexican GAAP   | U.S GAAP       | Difference
|----------------------- | -------------- | -------------- | ----------
|Deferred tax liability: |                |                |           
|At December 31,1999     | Ps (2,422,716) | Ps (2,514,133) | Ps 91,417 
|At December 31,2000     | (2,332,518)    | (2,379,456)    | (46,938)  
|Net Change              | Ps 90,198      | Ps 134,677     | Ps 44,479 

The net change in the deferred tax liabilities during the year ended December
  31, 2001 and 2000, was allocated to the following components:

|                                             | Mexica GAAP 2001 | U.S GAAP 2001 | Difference |    
|-------------------------------------------- | ---------------- | ------------- | ---------- | ---
|Deferred tax expense :                       | Ps (311,117)     | Ps (247,571)  | Ps 63,547  |    
|Monetary gain (1)                            | 98,305           | 105,517       | 7,211      | (1)
|                                             | (212,812)        | (142,054)     | 70,758     |    
|Gain (loss) from holding non-monetary assets | -                | 4,442         | 4,442      |    
|                                             | Ps (212,812)     | Ps (137,612)  | Ps 75,200  |    

(1) Amount included in the "Effect of inflation accounting on U.S. GAAP adjustments".



|                                             | Mexican GAAP 2000 | U.S GAAP 2000 | Difference |    
|-------------------------------------------- | ----------------- | ------------- | ---------- | ---
|Deferred tax expense :                       | Ps (136,337)      | Ps (72,799)   | Ps 63,538  |    
|Monetary gain (1)                            | 206,584           | 209,827       | 3,244      | (1)
|                                             | 70,247            | 137,028       | 66,782     |    
|Gain (loss) from holding non-monetary assets | 19,950            | (2,352)       | (22,303)   |    
|                                             | Ps 90,197         | Ps 134,676    | Ps 44,479  |    

(1) Amount included in the "Effect of inflation accounting on U.S. GAAP adjustments".

Under Mexican law, employees' profit sharing is computed at 10% of the individual
  income of each of the Company's subsidiaries. The calculation is based on taxable
  income adjusted to exclude the effects of inflation and asset restatement. While
  the employee profit sharing provision is calculated in a similar manner as income
  taxes it is classified as an operating expense under U.S. GAAP. The components
  of net deferred employee profit sharing liability under U.S. GAAP consist of
  the following :

|                                                            | December 31,
|----------------------------------------------------------- | ------------
|                                                            | 2001        
|Deferred employee profit sharing:                           |             
|Short-term:                                                 |             
|Inventories                                                 | Ps (7,847)  
|Accrued vacations                                           | 3,047       
|Total short-term                                            | Ps (4,800)  
|Long-term:                                                  |             
|Fixed assets                                                | (270)       
|Seniority premiums                                          | 5,601       
|Total long-term                                             | 5,331       
|Total deferred employee profit sharing
      before reserve | 531         
|Reserve for employee profit sharing                         | (531)       
|Total deferred employee profit sharing                      | Ps -        

The distribution of the net change in deferred employee profit sharing under
  U.S. GAAP for the years ended December 31, 2001, 2000 and 1999 is provided below:

|                                             | 2001     | 2000       | 1999    
|-------------------------------------------- | -------- | ---------- | --------
|Deferred profit sharing income               | Ps 8,883 | Ps (2,948) | Ps (265)
|Monetary gain                                | 193      | 682        | 820     
|Gain (loss) from holding non-monetary assets | 42       | (92)       | 71      
|                                             | Ps 9,118 | Ps (2,358) | Ps 626  

b. Extinguishment of Debt
  Under Mexican GAAP, gain or loss from an extinguishment of debt is recognized
  in the period of the extinguishment in a separate caption of the income statement
  of current operations, whereas, under U.S. GAAP, gain or loss from an extinguishment
  is an extraordinary item.

c. Seniority Premiums and pension plan
  Under Mexican GAAP, the Company used Bulletin D-3 for measuring the expenses
  and liabilities for pension plans and seniority premiums for the year 1999.
  During 2000, the Company adopted SFAS No. 87, "Employer's Accounting for Pensions"
  ("SFAS 87") to account for the seniority premium expense.

For US GAAP, SFAS 87 is used to account for the seniority premium and pension
  plan expenses. The difference between the Company's application of Bulletin
  D-3 and SFAS 87 consist of different date of adoption. See Note 17 for further
  information.

|                                            | Year ended December 31,
|------------------------------------------- | -----------------------
|                                            | 2001                   
|Service cost                                | Ps 12,301              
|Interest cost                               | 4,702                  
|Actual return on plan assets                | (353)                  
|Net amortization and deferral               | 653                    
|Settlement loss                             | 141                    
|Net cost under U.S. GAPP                    | 17,444                 
|Net cost under Mexican GAAP                 | (17,444)               
|Difference to be recognized under U.S. GAAP | Ps -                   

Assumptions used in the calculations of net cost under U.S. GAAP as of December
  31, are:

|                                         | Year ended December 31,
|---------------------------------------- | -----------------------
|                                         | 2001                   
|Weighted average discount rates          | 4.0 %                  
|Rates of increase in compensation levels | 1.0 %                  
|Expected long-term return on assets      | 6.5 %                  

The seniority premium and pension plan liabilities as of December 31, 2001
  and 2000, under SFAS 87 is as follows:

|                                                                                                                     | 2001           | 2000          
|-------------------------------------------------------------------------------------------------------------------- | -------------- | --------------
|Actuarial present value benefit obligations:                                                                         |                |               
|Vested benefit obligations                                                                                           | Ps    (56,796) | Ps   ( 24,462)
|Nonvested benefit obligations                                                                                        | (57,556)       | ( 29,258)     
|Accumulated benefit obligations                                                                                      | (114,352)      | ( 53,720)     
|Fair value of plan assets                                                                                            | 27,722         | 15,163        
|Accumulated benefit obligations in excess of plan assets                                                             | Ps   86,630    | Ps   ( 38,557)
|Projected benefit obligations                                                                                        | Ps  (134,851)  | Ps   ( 54,641)
|Plan assets                                                                                                          | 27,721         | 15,163        
|Unfunded projected benefit obligations                                                                               | (107,130)      | ( 39,478)     
|Unfunded projected benefit obligation to be recognized in uture years:                                               |                |               
|Unrecognized net transition asset                                                                                    | (1,368)        | ( 1,506)      
|Unrecognized net gain                                                                                                | (7,693)        | ( 12,249)     
|                                                                                                                     | (9,061)        | ( 13,755)     
|Unfunded projected benefit obligations to be recognized in the            Consolidated balance sheet under U.S. GAAP | (116,191)      | ( 53,233)     
|Accrued cost recognized in the consolidated balance sheet  Under Mexican GAAP                                        | 116,191        | 53,233        
|Additional liability under U.S. GAAP                                                                                 | Ps      -      | Ps           -

The assets of the seniority premium and pension plan trusts are invested in
  equity securities and corporate and government bonds.

The actual investment return of the seniority premium trusts based on fair
  market values is Ps (353) and Ps ( 3,174 ) as of December 31, 2001 and 2000,
  respectively.

Changes in the plan's funded status and plan assets during the year ended December
  31, 2001 and 2000 were as follows:

|                                               | 2001       | 2000     
|---------------------------------------------- | ---------- | ---------
|Change in benefit obligation:                  |            |          
|Benefit obligation at beginning of year        | Ps 122,870 | Ps 50,330
|Service cost                                   | 12,302     | 8,010    
|Interest cost                                  | 4,703      | 1,892    
|Actuarial losses                               | 3,687      | ( 2,543) 
|Benefits paid                                  | (8,711)    | ( 3,048) 
|Benefit obligation at end of year              | Ps 134,851 | Ps 54,641
|Change in plan assets:                         |            |          
|Fair value of plan assets at beginning of year | Ps 15,163  | Ps 20,691
|Creation of a new plan                         | 9,947      | -        
|Actual return on plan assets                   | 353        | 3,174    
|Company's contribution (distribution)          | 6,293      | (7,805)  
|Benefits paid                                  | (4,034)    | ( 897)   
|Fair value of plan assets at end of year       | Ps 27,722  | Ps 15,163

d. Stock Purchase Plan
  The Company has a stock purchase plan for key employees as described in Note
  13. The Company purchases the required number of shares granted under the terms
  of the plan in the stock market and deposits them into an employee trust. When
  the options are exercised the employees may to pay the Company an amount based
  on the exercise price of the option and receive the stock certificates from
  the employee trust or they may elect to receive the appreciation of the units
  in cash. At December 31, 2001 and 2000, Ps 301,565 and Ps 116,720, respectively,
  was recorded under Mexican GAAP reflecting the receivable due from the employee
  trust for outstanding units under the stock purchase plan. Under U.S. GAAP,
  this receivable would have been reflected as a reduction in stockholder's equity
  as additional treasury stock.

Based on the options available to the Company's employees and the experience
  in recent years, the stock purchase plan has characteristics which are in substance
  similar to stock appreciation rights under U.S. GAAP. Compensation expense for
  stock appreciation rights is measured at the end of each period as the amount
  by which the quoted market value of the shares of the Company's stock covered
  by a grant exceeds the option price or value specified under the plan and is
  accrued as a charge to expense over the periods the employee performs the related
  services. Changes in the quoted market value are reflected as an adjustment
  of accrued compensation and compensation gain (expense) in the periods in which
  the changes occur until the exercise date. During the years ended December 31,
  2001, 2000 and 1999, compensation benefit (expense) related to the stock purchase
  plan under U.S. GAAP would have amounted to Ps 24,476, Ps 29,364 and Ps (86,966)
  respectively.

Amounts paid to employees upon exercise of the stock appreciation rights amounted
  to Ps 1,955 and Ps 9,067 during the years ended December 31,2001, and 2000,
  respectively.

The following table summarizes the activity in treasury stock, under U.S. GAAP,
  for the three years in the period ended December 31, 2001.

|                                            | Units        | Ps (Thousands )
|------------------------------------------- | ------------ | ---------------
|Balance at January 1, 1999                  | 1,305,110    | Ps 10,239      
|Purchases                                   | 4,506,086    | 48,822         
|Issuance of shares upon exercise of options | ( 5,068,820) | ( 53,043)      
|Balance at December 31, 1999                | 742,376      | 6,018          
|Purchases                                   | 4,261,573    | 34,643         
|Issuance of shares upon exercise of options | ( 3,908,785) | ( 34,086)      
|Balance at December 31, 2000                | 1,095,164    | 6,575          
|Purchases                                   | -            | -              
|Issuance of shares upon exercise of options | (1,095,164)  | (6,575)        
|Balance at December 31, 2001                | -            | Ps -           

e. Effects of Inflation on U.S. GAAP Adjustments
  This item represents the inflation adjustment calculated under Bulletin B-10
  applied to the changes in monetary assets and liabilities generated by the application
  of U.S. GAAP to the Company's financial statements.

Effect of inflation accounting on U.S. GAAP adjustments for the years ended
  December 31,

|                                            | 2001      | 2000      | 1999      
|------------------------------------------- | --------- | --------- | ----------
|Adjustment relating to:                     |           |           |           
|Deferred income taxes                       | Ps 7,212  | Ps 3,243  | Ps 299,017
|Deferred employee profit sharing            | 192       | 682       | 820       
|Receivable under stock purchase plan        | 9,094     | 9,275     | 10,172    
|Accrued liability under stock purchase plan | 1,211     | 3,290     | 4,894     
|                                            | Ps 17,709 | Ps 16,490 | Ps 314,903

f. Minority Interest
  Under Mexican GAAP, the minority interest in consolidated subsidiaries is presented
  as a separate component within the stockholders' equity section in the consolidated
  balance sheet. For U.S. GAAP purposes, the minority interest is not included
  in stockholders' equity.

g. Equity in Earnings of Affiliates
  For Mexican GAAP, the Company accounts for its 50% joint venture in Costco de
  Mexico by the proportional consolidation method. For U.S. GAAP purposes, this
  investment is treated as an equity method investment. The Company's net investment
  in the Costco de Mexico Joint Venture under U.S. GAAP differs from that recorded
  under Mexican GAAP due to the method of accounting for pre-opening costs and
  deferred income taxes as summarized below:

|                                              | December 31, 
|--------------------------------------------- | -------------
|2001                                          | 2000         
|Investment in Costco de Mixico joint venture: |              
|Mexican GAAP                                  | Ps 2,091,480 
|U.S. GAAP                                     | 2,049,007    
|Adjustment                                    | Ps ( 42,473 )

Condensed financial information for the Costco de Mexico joint venture in accordance
  with U.S. GAAP is presented below.

|                                           | December 31,
|------------------------------------------ | ------------
|2001                                       | 2000        
|Current assets                             | Ps 2,173,386
|Non-current assets                         | 4,114,728   
|Total assets                               | Ps 6,288,114
|Current liabilities                        | Ps 1,551,502
|Non-current liabilities                    | 638,597     
|Stockholders' equity                       | 4,098,015   
|Total liabilities and stockholders' equity | Ps 6,288,114

|           | Year ended December 31,
|---------- | -----------------------
|2001       | 2000                   
|Revenues   | Ps 10,557,113          
|Net income | 189,701                

h. Basic income per unit and diluted net income per unit
  In accordance with SFAS No. 128, "Earnings per Share" U.S. GAAP requires disclosures
  of basic earnings per unit by using the weighted average number of units outstanding.
  Diluted net income per unit differs from basic net income per unit since the
  weighted average number of units is adjusted to include potential number of
  additional units that would have been outstanding under the stock purchase plan.

i. Cash Flow Information
  Under Mexican GAAP, the Company presents statements of changes in financial
  position. The changes in the financial statement balances included in this statement
  constitute the generation and application of resources stated in Pesos of constant
  purchasing power as of December 31, 2001.

The statement of cash flow presented below is in accordance with SFAS No. 95,
  "Statement of Cash Flows" ("SFAS 95") and includes the effect of the U.S. GAAP
  difference for the years ended December 31, 2001, 2000 and 1999.

|                                                                                                     | 2001       | 2000         | 1999        
|---------------------------------------------------------------------------------------------------- | ---------- | ------------ | ------------
|Net income                                                                                           | Ps 833,273 | Ps 1,248,895 | Ps 1,468,059
|Operating activities:                                                                                |            |              |             
|Adjustments to reconcile net income to resources 
      Provided by (used for) operating activities: |            |              |             
|Depreciation and amortization                                                                        | 591,296    | 576,438      | 510,470     
|Seniority premiums                                                                                   | 4,191      | 8,233        | 3,451       
|Minority interest                                                                                    | 5,301      | (5,857)      | 42          
|Deferred income taxes                                                                                | 137,612    | (137,028)    | 140,060     
|Deferred employee profit sharing                                                                     | (8,883)    | 2,948        | 265         
|Equity in earnings of affiliates                                                                     | (94,851)   | ( 148,706)   | ( 109,652)  
|Monetary gain                                                                                        | (214,986)  | ( 451,156)   | ( 923,667)  
|Extraordinary item-gain on extinguishment of debt                                                    | -          | ( 292)       | ( 1,012)    
|Unrealized exchange gains                                                                            | (23,736)   | 45,277       | (101,992)   
|Accrued Interest                                                                                     | 21,481     | 25,374       | 23,836      
|Unrealized loss on valuation of investments                                                          | (15,514 )  | -            | -           
|Write off of fixed assets                                                                            | 171,332    | 125,940      | 277,312     
|(Benefit) compensation expense of stock purchase
      plan                                          | (23,150)   | (29,363)     | 86,966      
|                                                                                                     | 1,383,366  | 1,260,703    | 1,374,138   
|Changes in operating assets and liabilities:                                                         |            |              |             
|(Increase) decrease in:                                                                              |            |              |             
|Trade accounts receivable                                                                            | 32,116     | 8,729        | (132,983)   
|Inventories                                                                                          | (24,589)   | ( 150,654)   | ( 802,020)  
|Other accounts and notes receivable                                                                  | (293,313)  | 91,141       | 229,771     
|Affiliated companies assets                                                                          | 11,037     | ( 2,307)     | (6, 943)    
|Prepaid expenses and other assets                                                                    | (61,289)   | ( 84,234)    | (32,968)    
|Increase (decrease) in:                                                                              |            |              |             
|Trade payables                                                                                       | (437,359)  | 224,933      | 994,169     
|Taxes payable                                                                                        | (76,334)   | 204,440      | (52,510)    
|Other accrued liabilities                                                                            | (55,674)   | 76,100       | ( 23,452)   
|                                                                                                     | (905,405)  | 368,148      | 173,064     
|Net cash provided by operating activities                                                            | 477,961    | 1,628,851    | 1,547,202   
|Financing activities:                                                                                |            |              |             
|Short terms bank loans                                                                               | 314,527    | 630,658      | 759,185     
|Repayment of bank loans                                                                              | (261,824)  | ( 566,229)   | ( 1,260,353)
|Repayment of bonds                                                                                   | -          | -            | (26,868)    
|Paid in capital from reissuance of treasury stock                                                    | (83,399)   | -            | -           
|Reissuance (repurchase) of treasury stock                                                            | 174,473    | (200,913)    | 235,241     
|Repurchase of shares for stock purchase plan, net                                                    | 6,575      | ( 557)       | (345)       
|Dividends paid                                                                                       | (116,255)  | ( 109,812)   | ( 117,746)  
|Net cash provided from financing activities                                                          | 34,097     | ( 246,853)   | (410,886)   
|Investing Activities:                                                                                |            |              |             
|Acquisition of subsidiaries, net of cash acquired                                                    | -          | -            | (28,743)    
|Investment in affiliated companies, net                                                              | (236,207)  | ( 103,173)   | (140,061)   
|Decrease in permanent investments                                                                    | 108,200    | -            | -           
|Acquisition of property and equipment, additions to real                                             |            |              |             
|estate, leasehold improvements and other assets                                                      | (824,882)  | ( 1,080,522) | ( 718,892)  
|Proceeds from sales of property and equipment                                                        | 36,435     | 5,998        | 3,386       
|Net cash used in investing activities                                                                | (916,454)  | ( 1,177,697) | ( 884,310)  
|Net (decrease) increase in cash and temporary investments                                            | (404,396)  | 204,301      | 252,006     
|Effects of inflation on cash at beginning of the year                                                | 29,912     | ( 70,425)    | ( 197,159)  
|Cash and temporary investments at beginning of the year                                              | 1,087,525  | 953,649      | 898,802     
|Cash and temporary investments at end of the year                                                    | Ps 713,041 | Ps 1,087,525 | Ps 953,649  

The changes in the financial statement balances included in this statement
  constitute cash flow activities stated in Mexican Pesos in purchasing power
  as of December 31, 2001 (including monetary and foreign exchange gains and losses,
  which are considered cash gains and losses in the constant Mexican Peso financial
  statements). Under Mexican GAAP, the effect of restatement of prior year's balance
  sheet balances to Mexican Pesos of constant purchasing power are reflected in
  the stated change of the asset or liability in the statements of changes in
  financial position and the gain from monetary position is presented as a component
  of operating activities. Included within financing activities in the statements
  of changes in financial position for notes payable and long-term debt securities
  are the effects of restating the prior year notes payable and debt securities
  balances to constant Mexican Pesos.

Under Mexican GAAP, foreign exchange gains or losses are included in the net
  change in the respective assets and liabilities within resources provided by
  or used for operating and financing activities. Under U.S. GAAP, foreign exchange
  gains or losses are presented as an adjustment to reconcile net income to net
  cash provided by or used for operating activities.

Net resources provided by operating activities reflect cash payments for interest
  and income taxes as follows:

|             | Year ended December 31,
|------------ | -----------------------
|2001         | 2000                   
|Interest     | Ps 158,113             
|Income taxes | 140,887                

j. Disclosure About Concentration of Credit Risk
  The Company's financial statements do not include any financial instruments
  that represent a significant concentration of credit risk.

k. Disclosure About Fair Value of Financial Instruments
  In accordance with SFAS No. 107, "Disclosures About Fair Value of Financial
  Instruments", ("SFAS 107") U.S. GAAP requires disclosures of the fair value
  of certain financial instruments for which it is practicable to estimate such
  value. For the purposes of SFAS 107, the estimated fair value of a financial
  instrument is the amount at which the instrument could be exchanged in a current
  transaction between willing parties, other than in a forced or liquidation sale.
  The fair amounts disclosed represent management's best estimates of fair value.

The following methods and assumptions are used to estimate the fair value of
  financial instruments:

Receivables, Temporary Investments and Short Term Borrowings: The carrying
  amounts approximate fair value because of the short maturity of those instruments.
  Values for temporary investments are obtained from quoted market values.

Permanent Investments: As of December 31, 2000 the estimated fair values of
  the Company's permanent investments are as follows:

|                   | 2000           
|------------------ | ---------------
|Fair value         | Carrying Amount
|Available for sale | Ps 123,714     

The fair values of permanent investments are estimated based on quoted market
  prices.

As of December 31, the estimated fair values of the Company's long-term debt
  are as follows:

|               | 2001            | 2000      
|-------------- | --------------- | ----------
|Fair value     | Carrying Amount | Fair value
|Long-term debt | Ps 998,440      | Ps 916,000

Rates currently available to the Company for debt with similar terms and remaining
  maturities are used to estimate fair value of existing debt.

As of December 31, the estimated fair values of the Company's financial derivatives
  are as follows:

|              | 2001            | 2000      
|------------- | --------------- | ----------
|Fair Value    | Notional Amount | Fair Value
|Currency swap | Ps 39,727       | Ps 458,000

As of December 31, the estimated fair values of the Company's unsecured notes
  are as follows:

|                | 2001            | 2000      
|--------------- | --------------- | ----------
|Fair Value      | Carrying Amount | Fair Value
|Unsecured notes | Ps 566,182      | Ps 528,257

l. Accounting for Debt and Equity Investments
  Under Mexican GAAP, temporary investments are carried at market value with unrealized
  gains or losses recognized in income. Permanent investments are carried at original
  cost restated utilizing the National Consumer Price Index.

In accordance with SFAS No. 115, "Accounting for Certain Debt and Equity Securities",
  the Company has determined that its equity securities should be classified as
  "available for sale" securities and reported at fair value, with unrealized
  gains or losses excluded from earnings and reported as a separate component
  of stockholders' equity.

During 2001, all the available for sale securities were sold at market value.
  The difference between the Mexican GAAP and US GAAP results is presented a reconciliation
  item of Reconciliation of the Net Income.

|Unrealized gains on available 
      For sale securities         | Mexican GAAP | U.S. GAAP  | Difference
|---------------------------------------------------------------- | ------------ | ---------- | ----------
|At December 31, 2000                                             | Ps 108,200   | Ps 123,714 | Ps 15,514 
|At December 31, 1999                                             | 99,180       | 99,180     | -         
|Change in unrealized gain on
      available for sale securities | Ps 9,020     | Ps 24,534  | Ps 15,514 

(1) Amount included in loss from holding non-monetary assets.

m. Lease Revenue
  The Company leases retail space in its stores to outside parties under non-cancelable
  operating leases.

Total rentals included in income for the years ended December 31, 2001, 2000
  and 1999 were Ps 113,171, Ps 105,949 and Ps 92,302 respectively.

At December 31, 2001, there were no operating leases with initial or remaining
  non-cancelable terms in excess of one year.

n. Segment Information
  The Company is principally engaged in the operation of supermarkets and mass
  merchandising stores in Mexico. In addition, the Company also operates Costco
  de Mexico, a warehouse membership club, as a joint venture with Costco Wholesale
  (Costco de Mexico Joint Venture).

The Company is in the retail industry. However, operating decisions are made
  separately for Costco de Mexico and the rest of the Company. The basis on which
  the Company identifies its segments are as follow: The Comercial Mexicana (CCM
  group) segment including the Comercial Mexicana supermarket, the Bodega warehouse
  style stores and the Mega hyper-markets. The Costco Mexico Joint Venture segment
  includes the Costco de Mexico warehouse membership club and the Other segment
  includes the Restaurantes California, a restaurant chain, and Sumesa, a mini-mart
  chain.

The measurement of profit or loss for each segment is net income. Information
  under Mexican GAAP on the Company's reportable segments is provided below:

|As of and for the year ended December 31, 2001 | CCM group     | Costco Mexico
      Joint Venture | Other        | Eliminations   | Total        
|---------------------------------------------- | ------------- | --------------------------------- | ------------ | -------------- | -------------
|Revenue from external customers                | Ps 26,620,528 | Ps 10,638,450                     | Ps 1,123,250 | Ps (5,319,225) | Ps 33,063,003
|Inter-segment revenues                         | 269,877       | -                                 | -            | (269,877)      | -            
|Depreciation and Amortization                  | 577,840       | 180,062                           | 15,285       | (90,031)       | 683,156      
|Interest expense                               | 247,442       | 16,944                            | 1,189        | (8,472)        | 257,103      
|Interest income                                | 32,576        | 33,598                            | 6,171        | (16,799)       | 55,546       
|Income taxes(1)                                | 183,617       | 66,024                            | 35,747       | (33,012)       | 252,376      
|Net income                                     | 590,650       | 290,206                           | 23,497       | (145,103)      | 759,250      
|Long-lived assets                              | Ps 12,693,035 | Ps 3,841,696                      | Ps 441,198   | Ps (1,920,848) | Ps 15,055,081
|Significant liabilities                        | 4,305,437     | 1,334,146                         | 117,305      | (667,073)      | 5,089,815    
|Capital expenditures                           | 861,775       | 423,278                           | 67,201       | (211,639)      | 1,140,615    



|As of and for the year ended December 31, 2000 | CCM group     | Costco
      Joint Venture | Other       | Eliminations   | Total        
|---------------------------------------------- | ------------- | -------------------------- | ----------- | -------------- | -------------
|Revenue from external customers                | Ps 27,222,574 | Ps 9,404,965               | Ps1,076,695 | Ps (4,702,482) | Ps 33,001,752
|Inter-segment revenues                         | 240,468       | -                          |             | (240,468)      | -            
|Depreciation and amortization                  | 564,408       | 128,274                    | 13,860      | (64,137)       | 642,405      
|Interest expense                               | 237,623       | 14,714                     | 679         | (7,357)        | 245,659      
|Interest income                                | 40,741        | 17,921                     | 5,228       | (8,960)        | 54,930       
|Income taxes(1)                                | 74,678        | (18,290)                   | 12,577      | 9,145          | 78,110       
|Extraordinary gain                             | 292           | -                          | -           | -              | 292          
|Net income                                     | 930,308       | 340,717                    | 50,117      | (170,358)      | 1,150,784    
|Long-lived assets                              | Ps 12,754,305 | Ps 3,421,261               | Ps 119,133  | Ps (1,710,630) | Ps 14,584,069
|Significant liabilities                        | 5,002,588     | 1,262,621                  | 71,510      | (631,310)      | 5,705,409    
|Capital expenditures                           | 994,344       | 454,012                    | 86,753      | (227,006)      | 1,308,103    

|As of and for the year ended December 31, 1999 | CCM group     | Costco
      Joint Venture | Other      | Eliminations   | Total        
|---------------------------------------------- | ------------- | -------------------------- | ---------- | -------------- | -------------
|Revenue from external customers                | Ps 26,188,966 | Ps 7,482,339               | Ps 967,997 | Ps (3,741,170) | Ps 30,898,132
|Inter-segment revenues                         | 223,867       | -                          | -          | (223,867)      | -            
|Depreciation and amortization                  | 499,929       | 117,947                    | 12,371     | (58,974)       | 571,273      
|Interest expense                               | 252,461       | 14,028                     | 2,017      | (7,013)        | 261,493      
|Interest income                                | 77,507        | 15,664                     | 1,495      | (7,832)        | 86,834       
|Income taxes(1)                                | 143,188       | 30,661                     | 885        | (15,331)       | 159,403      
|Extraordinary gain                             | 1,011         | -                          | -          | -              | 1,011        
|Net income                                     | 1,273,256     | 212,439                    | 48,883     | (106,219)      | 1,428,359    
|Long-lived assets                              | Ps 12,195,948 | Ps 3,144,468               | Ps 307,175 | Ps (1,572,233) | Ps 14,075,358
|Significant liabilities                        | 5,198,542     | 1,057,472                  | 85,056     | (528,735)      | 5,812,335    
|Capital expenditures                           | 661,718       | 526,451                    | 64,199     | (263,225)      | 989,143      

(1) Amounts include current and deferred income tax, asset tax and employee's
  profit sharing.

Significant liabilities comprise of trade payables. Long-lived assets consist
  of property, plant and equipment and other assets. The eliminations column refers
  to the inter-segment lease revenues of the real estate subsidiaries of CCM and
  the Costco de Mexico Joint Venture, and the 50% of Costco de Mexico Joint Venture
  not owned by the Company. No single customer accounts for more than ten percent
  of the consolidated revenues.

The Company operates in only one geographic segment, Mexico.

o. Condensed Financial Information
  The condensed balance sheet and income statement presented below reflect the
  Costco de Mexico Joint Venture as an equity investment and include the effects
  of all U.S. GAAP adjustments.

|                                           | December 31, 
|------------------------------------------ | -------------
|2001                                       | 2000         
|ASSETS                                     |              
|Current assets:                            |              
|Cash and temporary investments             | Ps 713,041   
|Inventories                                | 3,320,306    
|Other current assets                       | 1,038,431    
|                                           | 5,071,778    
|Non current assets                         | 13,295,822   
|Equity in affiliates                       | 1,996,420    
|Total assets                               | Ps 20,364,020
|LIABILITIES AND STOCKHOLDERS' EQUITY       |              
|Current liabilities                        | Ps 6,375,291 
|Long-term liabilities                      | 3,562,849    
|Total liabilities                          | 9,938,140    
|Minority interest                          | 15,913       
|Stockholders' equity                       | 10,409,967   
|Total liabilities and stockholders' equity | Ps 20,364,020

|                                          | Year ended December 31,
|----------------------------------------- | -----------------------
|2001                                      | 2000                   
|Net sales                                 | Ps 27,743,778          
|Operating income                          | 806,503                
|Comprehensive financing results           | (9,531)                
|Equity in earnings of affiliates          | 94,851                 
|Other income                              | 114,686                
|Income before taxes                       | 1,006,509              
|Income tax                                | (164,629)              
|Minority interest                         | (8,607)                
|Extraordinary item-extinguishment of debt |                        
|Net income                                | Ps 833,273             

p. New Accounting Pronouncements
  In June 2001, the FASB issued SFAS No. 141, "Business Combinations" ("SFAS 141").
  SFAS 141 supersedes APB opinion No. 16, "Business Combinations" and amends or
  supersedes a number of related interpretations of APB 16. SFAS 141 eliminates
  the pooling-of-interests method of accounting for business combinations, and
  changes the criteria to recognize intangible assets apart from goodwill. SFAS
  141 is required to be adopted for all business combinations initiated after
  June 30, 2001. Management has assessed the impact of the adoption of SFAS 141
  on its consolidated financial statements and believes the impact will not be
  material.

Also in June 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible
  Assets" ("SFAS 142"). SFAS 142 supersedes APB opinion No. 17, "Intangible Assets".
  Under SFAS 142, goodwill and indefinite lived intangible assets are no longer
  amortized but are reviewed annually, or more frequently if impairment indicators
  arise, for impairment. SFAS 142 is required to be applied at the beginning of
  an entity's fiscal year and to be applied to all goodwill and other intangible
  assets recognized in its financial statements at that date. Management is currently
  evaluating the impact that adoption of SFAS 142 will have on its consolidated
  financial statements.

In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
  Obligations" ("SFAS 143"). SFAS 143 addresses financial accounting and reporting
  for obligations associated with the retirement of tangible long-lived assets
  and the associated asset retirement costs. It applies to legal obligations associated
  with the retirement of long-lived assets that result from the acquisition, construction,
  development and/or the normal operation of a long-lived asset, except for certain
  obligations of lessees. SFAS 143 requires that the fair value of a liability
  for an asset retirement obligation be recognized in the period in which it is
  incurred if a reasonable estimate of fair value can be made. The associated
  asset retirement costs are capitalized as part of the carrying amount of the
  long-lived asset. SFAS 143 is effective for financial statements issued for
  fiscal years beginning after June 15, 2002. The Company does not expect the
  adoption of SFAS 143 to have a material impact on its financial condition and
  results of operations.

In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment
  or Disposal of Long-Lived Assets" ("SFAS 144"). SFAS 144 addresses financial
  accounting and reporting for the impairment or disposal of long-lived assets.
  SFAS 144 supersedes SFAS No. 121, "Accounting for the Impairment of Long-Lived
  Assets and for Long-Lived Assets to Be Disposed Of", and the accounting and
  reporting provisions of APB Opinion No. 30, "Reporting the Results of Operations
  - Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary,
  Unusual and Infrequently Occurring Events and Transactions", for the disposal
  of a segment of a business. The provisions of SFAS 144 are effective for financial
  statements issued for fiscal years beginning after December 15, 2001, with early
  application encouraged and generally are to be applied prospectively. The Company
  does not expect the adoption of SFAS 144 to have a material impact on its financial
  condition and results of operations.