"CSD" stands for "Canteen Stores Department", which is a department store meant for exclusive usage by people serving in the Armed Forces (here, the Pakistani Army). Since it sells groceries and other stuff (even suitcases, watches, and cars!), it is indeed a 'shop'.

Note : this terminology is also prevalent in India and Bangladesh, owing to the British Raj. Another term you may come across is "URC', or "Unit-Run Canteen", which is a departmental store staffed and managed by a specific military unit, with the profits going into the unit's funds.