Market Price and Dividend Information

Family Dollar's Common Stock is traded on the New York Stock Exchange under
the ticker symbol FDO.  At November 1, 2000 there were approximately 2,150
holders of record of the Common Stock.  The accompanying tables give the high
and low sales prices of the Common Stock and the dividends declared per share
for each quarter of fiscal 2000 and 1999.

<TABLE>

Market Prices and Dividends

<CAPTION>

2000                           High        Low        Dividend
<S>                           <C>          <C>          <C>
First Quarter..............   $23.44       $16.50       $.05
Second Quarter.............    19.38        14.00        .05 1/2
Third Quarter..............    22.50        15.25        .05 1/2
Fourth Quarter.............    21.31        14.25        .05 1/2

<CAPTION>

1999                           High        Low        Dividend
<S>                           <C>          <C>          <C>
First Quarter..............   $20.50       $11.50       $.04 1/2
Second Quarter.............    22.44        17.94        .05
Third Quarter..............    26.75        19.00        .05
Fourth Quarter.............    25.94        19.50        .05

</TABLE>


<PAGE>

<TABLE>

SUMMARY OF SELECTED FINANCIAL DATA

<CAPTION>

                                            August 26,       August 28,       August 29,       August 31,
Years Ended                                   2000             1999             1998             1997

<S>                                     <C>              <C>              <C>              <C>
Net sales.............................  $3,132,639,132   $2,751,181,355   $2,361,930,395   $1,994,973,237
Cost of sales and operating expenses..   2,861,727,685    2,528,502,088    2,195,942,470    1,873,496,500
Income before income taxes and
  cumulative effect of accounting
  change..............................     270,911,447      222,679,267      165,987,925      121,476,737
Income taxes..........................      98,894,200       82,600,000       62,700,000       46,800,000
Income before cumulative effect
  of accounting change................     172,017,247      140,079,267      103,287,925       74,676,737
Cumulative effect of change in
  method of accounting for income
  taxes...............................           -                -                -                -
Net income............................     172,017,247      140,079,267      103,287,925       74,676,737
Earnings per common share:
  Income before cumulative effect of
  accounting change...................           $1.00            $ .81            $ .60            $ .44
  Net income(1).......................           $1.00            $ .81            $ .60            $ .44
Dividends declared....................  $   36,858,685   $   33,656,702     $ 30,116,216     $ 26,848,520
Dividends declared per common share          $ .21 1/2        $ .19 1/2        $ .17 1/2        $ .15 2/3
Total assets..........................  $1,243,714,351   $1,095,251,636     $942,180,070     $780,293,852
Working capital.......................  $  338,655,573   $  341,408,422     $303,354,419     $283,476,028
Shareholders' equity..................  $  797,964,479   $  690,651,058     $578,150,707     $500,198,473
Stores opened.........................             406              366              315              236
Stores closed.........................             (41)             (59)             (65)             (50)
Number of stores - end of year........           3,689            3,324            3,017            2,767





<PAGE>

SUMMARY OF SELECTED FINANCIAL DATA

<CAPTION>

                   August 31,        August 31,      August 31,      August 31,     August 31,     August 31,
Years Ended           1996             1995            1994            1993           1992           1991

                <C>               <C>             <C>             <C>            <C>             <C>
                $1,714,627,092    $1,546,894,565  $1,428,440,427  $1,297,430,787 $1,158,703,861  $989,345,265
                 1,615,861,346     1,452,519,040   1,328,323,366   1,194,510,816  1,069,764,555   925,619,376


                    98,765,746        94,375,525     100,117,061     102,919,971     88,939,306    63,725,889
                    38,178,000        36,266,000      38,157,175      38,491,288     33,267,370    23,484,031

                    60,587,746        58,109,525      61,959,886      64,428,683     55,671,936    40,241,858


                        -                 -            1,139,153            -             -           -
                    60,587,746        58,109,525      63,099,039      64,428,683     55,671,936    40,241,858


                         $ .35             $ .34           $ .36           $ .39          $ .34         $ .24
                         $ .35             $ .34           $ .37           $ .39          $ .34         $ .24
                  $ 24,435,102      $ 21,837,249    $ 18,656,163    $ 16,325,918   $ 13,988,516   $11,960,851
                     $ .14 1/3         $ .12 2/3           $ .11       $ .09 2/3      $ .08 1/3         $ .07
                  $696,808,291      $636,233,767    $592,821,871    $537,445,610   $478,027,178  $399,271,302
                  $273,694,125      $264,671,854    $230,234,774    $205,863,199   $170,288,208  $136,207,278
                  $444,957,119      $407,750,588    $370,172,275    $323,281,504   $271,772,441  $227,319,970
                           223               213             202             174            160           122
                           (58)              (12)            (22)            (24)           (34)          (43)
                         2,581             2,416           2,215           2,035          1,885         1,759


(1) Figures represent both basic and diluted earnings per common share.

</TABLE>




<PAGE>

Management's Discussion and Analysis of Financial
Condition and Results of Operations

Net Sales

     Net sales increased approximately 13.9% ($381.5 million) in
fiscal 2000 compared with fiscal 1999, and approximately 16.5%
($389.3 million) in fiscal 1999 compared with fiscal 1998.  The
sales increases in fiscal 2000 and fiscal 1999 were attributable
to increased sales in existing stores and sales from new stores
opened as part of the Company's store expansion program.
     Comparable store sales increased approximately 5.2% in
fiscal 2000 and 7.8% in fiscal 1999, as compared with the
respective prior years, as customers continued to respond
favorably to the Company's everyday low pricing strategy.
Increased sales of hardlines merchandise have been the primary
contributor to the overall sales increases, with hardlines sales
increases in comparable stores of approximately 8.7% in fiscal
2000.  Hardlines as a percentage of total sales increased to
71.4% in fiscal 2000 compared to 69.2% in fiscal 1999.
Softlines as a percentage of sales decreased to 28.6% in fiscal
2000 (with hanging apparel and shoes representing 15.6%, basic
apparel 5.3% and domestics 7.7%) compared to 30.8% in fiscal
1999 (with hanging apparel and shoes representing 17.3%, basic
apparel 5.7% and domestics 7.8%).  The Company continues to
broaden its assortment of hardlines merchandise.  During the
fourth quarter of fiscal 2000 the Company executed a program in
the majority of its stores to reallocate selling space to
hardlines, including name brand, basic consumable merchandise
such as food, household chemicals and paper products, as well as
seasonal and giftware categories.  Space allocated to hanging
apparel has been reduced by 15% to 20%.  These changes, coupled
with below plan apparel sales in the fourth quarter, led to a
2.5% decrease in softline sales in comparable stores in fiscal
2000.  The space reallocation program was completed in all
stores in October 2000, and the Company expects the shift in the
merchandise mix to hardlines to continue into fiscal 2001. The
Company distributed five advertising circulars in fiscal 2000
and fiscal 1999.
     The comparable store sales increase of 7.8% in fiscal 1999
was also primarily attributable to the favorable customer
response to everyday low pricing and increased sales of
hardlines.  In fiscal 1999, comparable store hardlines sales
increased approximately 10.6% and softlines sales increased


<PAGE>


approximately 2.0%.  The Company distributed five advertising
circulars in fiscal 1999, which was four fewer circulars than
were distributed in fiscal 1998.
     Hardlines merchandise includes primarily household chemical
and paper products, health and beauty aids, candy, snack and
other food, electronics, housewares and giftware, toys, school
supplies, hardware and automotive supplies.  Softlines
merchandise includes men's, women's, boy's, girl's and infant's
clothing, shoes, and domestic items such as blankets, sheets and
towels.
     During fiscal 2000, the Company opened 406 stores and
closed 41 stores for a net addition of 365 stores, compared with
the opening of 366 stores and closing of 59 stores for a net
addition of 307 stores during fiscal 1999.  The Company also
expanded or relocated 153 stores in fiscal 2000, compared with
107 stores that were expanded or relocated in fiscal 1999.  In
addition, approximately 125 stores in fiscal 2000 and
approximately 350 stores in fiscal 1999 were renovated.  The
Company currently plans to open approximately 500 stores and
close approximately 50 stores for a net addition of 450 stores
during fiscal 2001.  The Company also currently expects to
renovate an additional 200 stores and expand or relocate
approximately 200 stores in fiscal 2001.  Store opening,
closing, expansion, relocation, and renovation plans are
continuously reviewed and are subject to change.

Cost of Sales and Margin

     Cost of sales increased approximately 13.3% ($243.5
million) in fiscal 2000 compared with fiscal 1999, and
approximately 15.4% ($244.8 million) in fiscal 1999 compared
with fiscal 1998.  These increases primarily reflected the
additional sales volume in each of the years.  Cost of sales, as
a percentage of net sales, was 66.3% in fiscal 2000, 66.6% in
fiscal 1999, and 67.3% in fiscal 1998.  The decrease in the cost
of sales percentage for fiscal 2000 was due primarily to a
decrease in clearance and advertising markdowns during the first
three quarters of the fiscal year.  This decrease was mitigated
throughout the year by the shift in sales to lower margin
branded consumable hardlines merchandise and away from higher
margin apparel, and by additional apparel clearance markdowns
during the fourth quarter.  The cost of sales percentages also



<PAGE>

are impacted by the effectiveness of merchandise purchasing
programs and by changes in merchandise shrinkage losses and
freight costs.  A reduction in advertising markdowns due to the
elimination of four advertising circulars and a reduction in
clearance markdowns as a percentage of sales were the primary
reasons for the decrease in the cost of sales percentage for
fiscal 1999 compared with fiscal 1998. This decrease was
mitigated by the increase in sales of lower margin, basic
consumable merchandise.
     For fiscal 2001, the Company's plan is for the cost of
sales percentage to remain at about the same level as in fiscal
2000.

Selling, General and Administrative Expenses

     Selling, general and administrative expenses increased
approximately 12.9% ($89.75 million) in fiscal 2000 compared
with fiscal 1999, and approximately 14.5% ($87.77 million) in
fiscal 1999 compared with fiscal 1998.  The increases in these
expenses primarily were attributable to additional costs arising
from the continued growth in the number of stores in operation.
As a percentage of net sales, selling, general and
administrative expenses were 25.1% in fiscal 2000, 25.3% in
fiscal 1999, and 25.7% in fiscal 1998.  The percentage decrease
in fiscal 2000 primarily was due to the leverage provided by the
5.2% increase in sales in comparable stores and effective
expense control.  These effects were partially offset by
start-up costs of the Company's fifth full-service distribution
center in Rowan County, Kentucky and by increases in rent and
depreciation expenses as a percentage of net sales.
     The percentage decrease in expenses in fiscal 1999
primarily was due to the leverage provided by the 7.8% increase
in sales in comparable stores, improved store labor performance
as well as a reduction in advertising expenses due to the
elimination of four advertising circulars.  These effects were
partially offset by start-up costs of the Company's fourth full-
service distribution center in Duncan, Oklahoma and by increased
technology costs.
     Selling, general and administrative expenses are expected
to increase in fiscal 2001 due to continued store growth.
However, the Company continues to focus on cost containment
efforts and plans for selling, general, and administrative



<PAGE>

expenses in fiscal 2001 to decrease modestly as a percentage of
net sales.

Income Taxes

     The effective tax rate was 36.5% in fiscal 2000, 37.1% in
fiscal 1999 and 37.8% in fiscal 1998.  The decrease in the
effective tax rates compared to the prior years resulted
primarily from maintaining a low effective state tax rate and
taking advantage of certain federal tax credit programs.

Liquidity and Capital Resources

     The Company has consistently maintained a strong position
of liquidity and financial strength.  Cash provided by operating
activities during fiscal 2000 was $183.6 million as compared to
$110.9 million in fiscal 1999 and $211.5 million in fiscal 1998.
These amounts have enabled the Company to fund its regular
operating needs, capital expenditure program and cash dividend
payments.  In addition, the Company maintains $100 million of
unsecured bank lines of credit for short-term financing and
periodically utilizes short-term borrowings to meet the cash
needs of its expansion program and seasonal inventory increases.
There were no short-term or long-term borrowings during fiscal
2000, 1999 or 1998.
     Merchandise inventories at August 26, 2000, increased 13.3%
over the level at August 28, 1999.  This increase was due in
part to additional inventory for 365 new stores and to stock the
new distribution center in Rowan County, Kentucky.
     The increase in capital expenditures to $172.1 million in
fiscal 2000 from $125.0 million in fiscal 1999 primarily was due
to expenditures incurred in fiscal 2000 to complete construction
of the fifth distribution center, costs to open an additional 58
new stores, as well as the costs associated with the space
reallocation program.  The Company also continued to invest in
information technology in fiscal 2000.  Capital expenditures for
fiscal 2001 are expected to be approximately $165 million, which
primarily represent estimated expenditures for new store
expansion, including construction of an increased number of
stores, existing store expansion, relocation, and renovation,
and the start of construction of the sixth distribution center
in the spring of 2001.  The new store expansion will require
additional investment in merchandise inventories.


<PAGE>


     On November 5, 1999, the Company announced that the Board
of Directors had authorized the purchase of up to 5,000,000
shares of its outstanding Common Stock from time to time as
market conditions warrant.  As of August 26, 2000, the Company
had purchased in the open market, 2,148,000 shares at a cost of
$33,611,352.
     Capital spending plans, including store expansion, are
continuously reviewed and are subject to change.  Cash flow from
current operations and short-term borrowings under the bank
lines of credit are expected to be sufficient to meet all
foreseeable liquidity and capital resource needs, including
store expansion and other capital spending programs and any
Common Stock purchases.  No long-term borrowings are now
expected to be required during fiscal 2001.

Forward-Looking Statements

     Certain statements contained herein and elsewhere in this
Annual Report which are not historical facts are forward-looking
statements made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995.  These
forward-looking statements address activities or events which
the Company expects will or may occur in the future, such as
future capital expenditures, store openings, closings,
renovation, expansions and relocations, additional distribution
facilities, and other aspects of the Company's future business
and operations.  The Company cautions that a number of important
factors could cause actual results to differ materially from
those expressed in any forward-looking statements, whether
written or oral, made by or on behalf of the Company.  Such
factors include, but are not limited to, competitive factors and
pricing pressures, general economic conditions, changes in
consumer demand, inflation, merchandise supply constraints,
general transportation delays or interruptions, dependence on
imports, changes in currency exchange rates, tariffs, quotas and
freight rates, availability of real estate, costs and delays
associated with building, opening and operating new distribution
facilities, costs and potential problems associated with the
implementation of new systems and technology, including supply
chain systems and electronic commerce, changes in energy prices
and the impact on consumer spending and the Company's costs, and
the effects of legislation on wage levels and entitlement
programs. Consequently, all of the forward-looking statements

<PAGE>

made are qualified by these and other factors, risks and
uncertainties.  The Company does not undertake to publicly
update or revise its forward-looking statements even if
experience or future changes make it clear that projected
results expressed or implied in such statements will not be
realized.



<PAGE>

<TABLE>

Family Dollar Stores, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME

<CAPTION>
                                                             August 26,               August 28,              August 29,
Years Ended                                                    2000                      1999                    1998

<S>                                                      <C>                      <C>                     <C>
Net sales..........................................      $ 3,132,639,132          $ 2,751,181,355         $ 2,361,930,395
Costs and expenses:
  Cost of sales....................................        2,076,916,042            1,833,441,611           1,588,655,757
  Selling, general and administrative..............          784,811,643              695,060,477             607,286,713
                                                           2,861,727,685            2,528,502,088           2,195,942,470

Income before income taxes.........................          270,911,447              222,679,267             165,987,925
Income taxes (Note 5)..............................           98,894,200               82,600,000              62,700,000

Net income.........................................      $   172,017,247          $   140,079,267         $   103,287,925

Net income per common share-basic (Note 9):........                $1.00                     $.81                    $.60


   Average shares - basic (Note 9)................           171,697,772              172,511,199             172,008,335

Net income per common share - diluted (Note 9):...                 $1.00                     $.81                    $.60

   Average shares - diluted (Note 9)..............           172,648,787              173,834,350             173,223,635


The accompanying notes are an integral part of the consolidated financial statements.

</TABLE>


<PAGE>


REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholders
of Family Dollar Stores, Inc.

In our opinion, the accompanying consolidated balance sheets and the
related consolidated statements of income, of shareholders' equity and of
cash flows present fairly, in all material respects, the financial
position of Family Dollar Stores, Inc. and its subsidiaries at August 26,
2000 and August 28, 1999, and the results of their operations and their
cash flows for each of the three years in the period ended August 26,
2000, in conformity with accounting principles generally accepted in the
United States of America.  These financial statements 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 of these statements in accordance with auditing
standards generally accepted in the United States of America, which
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, assessing the
accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation.  We believe
that our audits provide a reasonable basis for our opinion.



PRICEWATERHOUSECOOPERS LLP


September 25, 2000
Charlotte, North Carolina



<PAGE>

<TABLE>

Family Dollar Stores, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS

<CAPTION>
                                                                             August 26,       August 28,
                                                                               2000             1999
<S>                                                                     <C>                <C>
ASSETS
Current assets:
  Cash and cash equivalents.................................            $   43,558,010     $   95,301,411
  Merchandise inventories...................................               644,614,067        568,780,481
  Deferred income taxes (Note 5)............................                51,563,225         47,066,920
  Prepayments and other current assets......................                10,937,390          8,806,072
     Total current assets ..................................            $  750,672,692     $  719,954,884

Property and equipment, net (Note 2)........................               487,585,296        371,141,298
Other assets................................................                 5,456,363          4,155,454
                                                                        $1,243,714,351     $1,095,251,636


LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Accounts payable..........................................            $  277,265,022     $  244,809,886
  Accrued liabilities (Note 4)..............................               127,575,281        124,279,005
  Income taxes payable (Note 5).............................                 7,176,816          9,457,571
     Total current liabilities..............................               412,017,119        378,546,462

Deferred income taxes (Note 5)..............................            $   33,732,753     $   26,054,116

Commitments and contingencies (Note 7)

Shareholders' equity (Notes 8 and 9):
  Preferred stock, $1 par; authorized and unissued 500,000 shares
  Common stock, $.10 par; authorized 300,000,000 shares ......              18,363,670         18,310,933
  Capital in excess of par....................................              28,516,899         22,808,499
  Retained earnings...........................................             796,039,456        660,880,894
                                                                           842,920,025        702,000,326
  Less common stock held in treasury, at cost.................              44,955,546         11,349,268
                                                                           797,964,479        690,651,058
                                                                        $1,243,714,351     $1,095,251,636

The accompanying notes are an integral part of the consolidated financial statements.

</TABLE>


<PAGE>

<TABLE>

Family Dollar Stores, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

<CAPTION>
                                                                              Capital in
Years Ended August 26, 2000, August 28, 1999                   Common           excess           Retained         Treasury
and August 29, 1998                                             stock           of par           earnings           stock

<S>                                                       <C>                 <C>              <C>              <C>
Balance, September 1, 1997
    (91,031,478 shares common stock;
     5,179,233 shares treasury stock)..............       $   9,103,148       $ 21,157,973     $481,286,620     $ 11,349,268
Net income for the year............................                                             103,287,925
Issuance of 267,236 common shares under employee
    stock option plan, including tax benefits (Note 8)           26,724          4,753,801
Issuance of 91,263,654 common shares as a result of
    stock split, including 5,179,233 shares of treasury
    stock.............................................        9,126,365         (9,126,365)
Less dividends on common stock, $.17 1/2 per share....                                          (30,116,216)

Balance, August 29, 1998
   (182,562,368 shares common stock;
    10,358,466 shares treasury stock).................       18,256,237         16,785,409      554,458,329       11,349,268
Net income for the year...............................                                          140,079,267
Issuance of 546,960 common shares
    under employee stock option plan,
    including tax benefits (Note 8).....................         54,696          6,023,090
Less dividends on common stock, $.19 1/2 per share....                                          (33,656,702)

Balance, August 28, 1999
   (183,109,328 shares common stock;
    10,358,466 shares treasury stock)................        18,310,933         22,808,499      660,880,894       11,349,268
Net income for the year..............................                                           172,017,247
Issuance of 527,370 common shares
    under employee stock option plan,
    including tax benefits (Note 8) ................             52,737          5,683,474
Purchase of 2,148,000 common shares for treasury                                                                  33,611,352
Issuance of 1,680 shares of treasury stock under
    the Family Dollar 2000 outside directors plan                                   24,926                            (5,074)
Less dividends on common stock, $.21 1/2 per share...                                           (36,858,685)

Balance, August 26, 2000
     (183,636,698 shares common stock;
      12,504,786 shares treasury stock)..............     $  18,363,670       $ 28,516,899     $796,039,456     $ 44,955,546

The accompanying notes are an integral part of the consolidated financial statements.

</TABLE>


<PAGE>

<TABLE>

Family Dollar Stores, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS

<CAPTION>
                                                               August 26,             August 28,       August 29,
Years Ended                                                      2000                   1999             1998

<S>                                                           <C>                   <C>              <C>
Cash flows from operating activities:
  Net income...........................                       $172,017,247          $140,079,267     $103,287,925
  Adjustments to reconcile net income to net cash
    provided by operating activities:
      Depreciation and amortization....                         54,509,412            43,788,467       34,842,830
      Deferred income taxes............                          3,182,332            (1,071,000)     (10,403,000)
      (Gain) Loss on disposition of property and equipment         417,405               (58,130)         (37,710)
      Changes in operating assets and liabilities:
        Merchandise inventories........                        (75,833,586)         (103,223,922)       2,388,924
        Prepayments and other current assets                    (2,131,318)           (2,649,558)        (274,994)
        Other assets...................                         (1,300,909)             (364,916)         565,801
        Accounts payable and accrued liabilities                34,976,278            36,614,611       80,597,237
        Income taxes payable...........                         (2,280,755)           (2,231,494)         570,262
                                                               183,556,106           110,883,325      211,537,275
Cash flows from investing activities:
  Capital expenditures................                        (172,055,853)         (125,038,135)     (96,853,635)
  Proceeds from dispositions of property and equipment             685,038             1,926,366        1,523,405
                                                              (171,370,815)         (123,111,769)     (95,330,230)
Cash flows from financing activities:
  Purchases of common stock for treasury                       (33,606,278)                   -                -
  Exercise of employee stock options,
    including tax benefits                                       5,761,137             6,077,786        4,780,525
  Payment of dividends...............                          (36,083,551)          (32,768,604)     (29,235,197)
                                                               (63,928,692)          (26,690,818)     (24,454,672)

Net (decrease) increase in cash and cash equivalents           (51,743,401)          (38,919,262)      91,752,373
Cash and cash equivalents at beginning of year                  95,301,411           134,220,673       42,468,300
Cash and cash equivalents at end of year..                    $ 43,558,010          $ 95,301,411     $134,220,673


Supplemental disclosures of cash flow information:
  Cash paid during the year for:
      Interest.....................                           $        -            $        -       $    12,594
      Income taxes.................                             95,316,735            82,714,126      70,840,009


The accompanying notes are an integral part of the consolidated financial statements.

</TABLE>


<PAGE>

Family Dollar Stores, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended August 26, 2000, August 28, 1999, and August 29, 1998



1.   Description of Business and Summary of Significant Accounting Policies:

Description of business:
     The Company operates a chain of neighborhood retail discount stores in
     39 contiguous states in the Northeast, Southeast, Midwest and Southwest.
     The Company manages its business on the basis of one reportable segment.
     The Company's products include hardlines merchandise such as household
     products, health and beauty aids and snack and other food, and softlines
     merchandise such as clothing, shoes and domestic items.

Principles of consolidation:
     The consolidated financial statements include the accounts of the
     Company and its subsidiaries, all of which are wholly-owned.  All
     significant intercompany balances and transactions have been eliminated.

Cash equivalents:
     The Company considers all highly liquid investments with an original
     maturity of three months or less to be cash equivalents. The carrying
     amount of the Company's cash equivalents approximates fair value due to
     the short maturities of these investments.

Merchandise inventories:
     Inventories are valued using retail prices less markon  percentages, and
     approximate the lower of first-in, first-out (FIFO) cost or market.

Property and equipment and depreciation:
     Property and equipment is stated at cost.  Depreciation for financial
     reporting purposes is being provided principally by the straight-line
     method over the estimated useful lives of the related assets, and by
     straight-line and accelerated methods for income tax reporting purposes.

     Estimated useful lives are as follows:
     Buildings                                  33-40 years
     Furniture, fixtures and equipment           3-10 years
     Transportation equipment                    3- 6 years
     Leasehold improvements                      5- 7 years

The Company capitalizes certain costs incurred in connection with developing,
obtaining and implementing software for internal use. Capitalized costs are
amortized over the expected economic life of the assets, generally ranging
from five to eight years.


<PAGE>

Advertising costs:
     Advertising costs, net of co-op recoveries from vendors, are expensed
     the first time the advertising is run and amounted to $8.7 million,
     $10.6 million, and $16.0 million in fiscal 2000, 1999,and 1998,
     respectively.

Store opening and closing costs:
     The Company charges pre-opening costs against operating results when
     incurred.  When a store is identified for closing, the remaining
     investment in fixed assets, net of expected recovery value, is
     expensed.  For properties under operating lease agreements, the present
     value of any remaining liability under the lease, net of expected
     sublease and lease termination recoveries, is expensed when the closing
     is determined.

Selling, general and administrative expenses:
     Buying, warehousing and occupancy costs, including depreciation, are
     included in selling, general and administrative expenses.

Income taxes:
     Under Statement of Financial Accounting Standards No. 109, "Accounting
     for Income Taxes," the Company records deferred income tax assets and
     liabilities for the expected future tax consequences of temporary
     differences between the financial reporting bases and the income tax
     bases of its assets and liabilities.

Stock options:
     The Company accounts for stock based compensation using the intrinsic
     value method prescribed in Accounting Principles Board Opinion No. 25,
     "Accounting for Stock Issued to Employees," and related
     Interpretations.  The exercise price of options awarded under the
     Company's non-qualified stock option plan has been equal to the fair
     market value of the underlying common stock on the date of grant.
     Accordingly, no compensation expense has been recognized for options
     granted under the plan.  Income tax benefits attributable to stock
     options exercised are credited to capital in excess of par.

Fiscal year:
     The Company's fiscal years beginning with 1998 now generally end on the
     Saturday closest to August 31, but may deviate from this convention
     during certain years by one week in order to coincide with the standard
     "retail" calendar.

Use of estimates:
     The preparation of the Company's consolidated financial statements, in
     conformity with generally accepted accounting principles, requires
     management to make estimates and assumptions.  These estimates and
     assumptions affect the reported amounts of assets and liabilities, the
     disclosure of contingent assets and liabilities at the date of the
     financial statements, and the reported amounts of revenues and expenses
     during the reporting period.  Actual results could differ from these
     estimates.


<PAGE>

2.  Property and Equipment:

<TABLE>
<CAPTION>
                                           August 26,                August 28,
                                             2000                      1999
<S>                                    <C>                       <C>
Buildings............................  $  174,304,111            $  128,814,803
Furniture, fixtures and equipment....     387,403,447               310,275,915
Transportation equipment.............      34,219,526                26,892,567
Leasehold improvements...............     100,964,041                79,010,743
Construction in progress.............      16,471,605                 8,313,731
                                          713,362,730               553,307,759

Less accumulated depreciation
   and amortization.................      242,120,125               192,824,434
                                          471,242,605               360,483,325
Land................................       16,342,691                10,657,973
                                       $  487,585,296            $  371,141,298

</TABLE>


3.  Lines of Credit and Short-Term Borrowings:

The Company has two unsecured bank lines of credit for short-term
revolving borrowings of up to $50,000,000 each, or $100,000,000 of total
borrowing capacity.  The lines of credit expire on March 31, 2002 and
March 27, 2001, respectively, and the Company expects that the line
expiring on March 27, 2001, will be extended.  Borrowings under these
lines of credit are at a variable interest rate based on short-term
market interest rates.  The Company may convert up to $50,000,000 of the
line of credit expiring on March 31, 2002, into either a five or seven
year term loan, at the bank's variable prime rate.  The Company did not
borrow against these lines of credit in fiscal 2000 or fiscal 1999.

The Company had outstanding letters of credit of $33,722,930 and
$27,130,491 at August 26, 2000 and August 28, 1999, respectively.


4.	Accrued Liabilities:

<TABLE>
<CAPTION>
                                             August 26,           August 28,
                                               2000                 1999
<S>                                     <C>                   <C>
Compensation........................... $  30,992,226	      $  30,144,697
Insurance................................  46,328,121	         45,921,369
Taxes other than income taxes............  27,563,837	         23,709,222
Other.................................     22,691,097	         24,503,717
                                        $ 127,575,281	      $ 124,279,005
</TABLE>


<PAGE>

5.	Income Taxes:

The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities as of
August 26, 2000 and August 28, 1999, were as follows:


<TABLE>
<CAPTION>
                                                     August 26,      August 28,
                                                       2000            1999
<S>                                               <C>              <C>
Deferred income tax liabilities:
  Excess of book over tax basis of
    property and equipment..............          $ 33,732,753     $ 26,054,116

Deferred income tax assets:
  Excess of tax over book basis
    of inventories......................          $ 22,800,709     $ 22,123,771
  Currently nondeductible accruals for:
    Insurance...........................            18,322,772       18,102,577
    Vacation and bonus.pay..............             3,938,339        2,520,977
    Closed store lease liabilities......             1,954,775        1,960,599
  State net operating losses                                            250,000
  Other.................................             4,546,630        2,483,996
    Gross deferred income tax assets....            51,563,225       47,441,920
  Valuation allowance for deferred
    income tax assets...................                   -           (375,000)
    Net deferred income tax assets......          $ 51,563,225     $ 47,066,920

</TABLE>

The provisions for income taxes in each of the three years in the
period ended August 26, 2000, were as follows:

<TABLE>
<CAPTION>

                    2000                   1999                 1998
<S>             <C>                    <C>                  <C>
Current:
   Federal...   $85,858 739            $75,746,000          $67,103,000
   State.....     9,853,129              7,925,000            6,000,000
                 95,711,868             83,671,000           73,103,000

Deferred:
   Federal...     1,567,367              1,109,000           (9,431,000)
   State.....     1,614,965             (2,180,000)            (972,000)
                  3,182,332             (1,071,000)         (10,403,000)
                $98,894,200            $82,600,000          $62,700,000

</TABLE>


<PAGE>

The following table summarizes the components of income tax expense
in each of the three years in the period ended August 26, 2000:

<TABLE>
<CAPTION>
                                                 2000                         1999                        1998
                                                           %                           %                             %
                                        Income tax   of pre-tax      Income tax  of pre-tax      Income tax    of pre-tax
                                          expense       income         expense      income         expense        income

<S>                                      <C>                <C>       <C>               <C>       <C>                 <C>
Computed "expected" federal income tax   $94,818,998        35.0      $77,937,746       35.0      $58,095,773         35.0
State income taxes, net of federal
     income tax benefit...........         5,302,490         2.0        3,227,862        1.5        4,943,200          3.0
Other.............................        (1,227,288)       (0.5)       1,434,392        0.6         (338,973)        (0.2)
Actual income tax expense.........       $98,894,200        36.5      $82,600,000       37.1      $62,700,000         37.8

</TABLE>


<PAGE>


6.  Employee Benefit Plans:


Incentive compensation plan:
     The Company has an incentive profit-sharing plan whereby, at the
     discretion of the Board of Directors, the Company may pay certain
     employees and officers an aggregate amount not to exceed 5% of the
     Company's consolidated income before income taxes.  Expenses under the
     profit-sharing plan were $3,989,125 in fiscal 2000, $3,786,933 in fiscal
     1999, and $3,455,060 in fiscal 1998.

Compensation deferral plan:
     The Company has a voluntary compensation deferral plan, under Section
     401(k) of the Internal Revenue Code, available to eligible employees. At
     the discretion of the Board of Directors, the Company makes contributions
     to the plan which are allocated to participants, and in which they become
     vested, in accordance with formulas and schedules defined by the plan.
     Company expenses for contributions to the plan were $1,410,497 in fiscal
     2000, $1,310,588 in fiscal 1999, and $1,124,569 in fiscal 1998.


<PAGE>

7.  Commitments and Contingencies:

Operating leases:
Except for its executive offices and primary distribution centers, the
Company generally conducts its operations from leased facilities.
Normally, store real estate leases are for initial terms of from five
to fifteen years with multiple renewal options for additional five
year periods.  Certain leases provide for contingent rental payments
based upon a percentage of store sales.

Rental expenses on all operating leases, both cancellable and
non-cancellable, for each of the three years in the period ended
August 26, 2000, were as follows:

<TABLE>
<CAPTION>
                               2000            1999           1998
<S>                        <C>             <C>             <C>
Minimum rentals,
  net of minor
  sublease rentals......   $126,489,927    $107,620,387    $90,616,520
Contingent rentals.......     3,819,191       3,963,680      2,619,790
                           $130,309,118    $111,584,067    $93,236,310
</TABLE>

Future minimum rental payments required under operating leases that have
initial or remaining non-cancellable lease terms in excess of one year as of
August 26, 2000, were as follows:

<TABLE>
<CAPTION>
             Fiscal Year:                 Minimum Rental
            <C>                            <C>
                2001                       $117,341,035
                2002                        102,128,477
                2003                         84,028,317
                2004                         60,531,885
                2005                         34,201,420
            Thereafter                       56,541,863
                                           $454,772,997
</TABLE>

Insurance liabilities:
     The Company is primarily self-insured for health care, property
     loss, workers' compensation and general liability costs.  Self-
     insurance liabilities are based on the total estimated costs of
     claims filed and claims incurred but not reported, and are not
     discounted.


<PAGE>

Litigation:
     The Company is subject to legal proceedings and claims which arise in
     the ordinary course of business.  The Company believes that the final
     disposition of these matters will not have a material adverse effect
     on its financial position, results of operation or liquidity.


<PAGE>

8.   Employee Stock Option Plan:

     The Company's non-qualified stock option plan provides for the
granting of options to key employees to purchase shares of
common stock at prices not less than fair market value on the
date of the grant. Options are exercisable to the extent of 40%
after the second anniversary of the grant, an additional 30%
annually on a cumulative basis, and expire five years from the
date of the grant.
     The Company has adopted the disclosure-only provisions of
Statement of Financial Accounting Standards No. 123, "Accounting
for Stock-Based Compensation."  If compensation cost for the
Company's stock-based compensation plan had been determined
based on the fair value at the grant date for awards under this
plan consistent with the methodology prescribed under this
statement, net income and net income per share would have been
reduced to the pro forma amounts indicated in the table below.

<TABLE>
<CAPTION>
                                August 26,      August 28,     August 29,
                                  2000            1999           1998
<S>                            <C>             <C>           <C>
Net income - as reported       $172,017,247    $140,079,267  $103,287,925
Net income - pro forma         $169,699,506    $138,568,250  $102,367,767
Net income per share -
   as reported
     basic                        $1.00            $.81           $.60
     diluted                      $1.00            $.81           $.60
Net income per share -
   pro forma
     basic                        $ .99            $.80           $.60
     diluted                      $ .98            $.80           $.59

</TABLE>

<PAGE>

     The pro forma effects on net income for fiscal 2000, 1999, and 1998
are not representative of the pro forma effect on net income in future
years because they do not take into consideration pro forma compensation
expense related to grants made prior to fiscal 1998.  The average fair
value of options granted during fiscal 2000, 1999 and 1998 is $5.82,
$4.84 and $3.66 per share, respectively.
     The fair value of each option grant is estimated on the date of
grant using the Black-Scholes option pricing model with the following
assumptions:

<TABLE>
<CAPTION>
                                August 26,     August 28,      August 29,
                                   2000           1999            1998

<S>                                <C>          <C>             <C>
Expected dividend yield             1.00%        1.13%           1.36%
Expected stock price volatility    35.32%       33.54%          30.53%
Weighted average risk-free
   interest rate                    6.01%        4.88%           5.73%
Expected life of options (years)    3.5          3.5             3.5

</TABLE>


<PAGE>

     The summary of the status of the Company's stock-based compensation
plan as of August 26, 2000, August 28, 1999 and August 29, 1998, and
changes during the years then ended were as follows:

<TABLE>
<CAPTION>
                                 Options        Range of Option    Weighted Average
                               Outstanding      Prices Per Share    Exercise Price

<S>                             <C>            <C>                      <C>
Balance, September 1, 1997      3,142,008      $ 3.50 to $10.88         $ 5.96
Granted                         1,224,800       10.88 to  20.75          13.31
Exercised                        (499,413)       3.50 to   7.08           6.20
Cancelled                        (128,060)       4.08 to  18.00           7.50

Balance, August 29, 1998        3,739,335      $ 3.50 to $20.75         $ 8.28
Granted                           855,600       12.75 to  24.75          16.82
Exercised                        (546,960)       3.50 to   9.67           5.26
Cancelled                        (137,225)       4.33 to  24.00          10.34

Balance, August 28, 1999        3,910,750      $ 3.83 to $24.75         $10.50
Granted                           918,150       14.75 to  21.75          18.46
Exercised                        (527,370)       3.83 to  17.38           5.40
Cancelled                        (132,755)       5.00 to  23.50          14.62

Balance, August 26, 2000        4,168,775      $ 3.83 to $24.75         $12.76

</TABLE>



     At August 26, 2000, August 28, 1999, and August 29, 1998, options for
1,380,413, 983,507 and 660,687 shares were exercisable, respectively.  The
following table summarizes information about stock options outstanding at
August 26, 2000:

<TABLE>
<CAPTION>
                      Options Outstanding                             Options Exercisable
                   Number    Weighted Average                      Number
    Range of     Outstanding    Remaining     Weighted Average  Exercisable  Weighted Average
Exercise Prices  at 8/26/00  Contractual Life  Exercise Price   at 8/26/00     Exercise Price

<S>               <C>           <C>              <C>             <C>            <C>
$ 3.83 to $ 8.33  1,218,845     1.18 Years       $ 6.16            844,891      $ 6.11
  8.34 to  16.13  1,723,730     2.43              13.08            503,642       11.87
 16.14 to  24.75  1,226,200     3.98              18.89             31,880       17.81

$ 3.83 to $24.75  4,168,775     2.52 Years       $12.76          1,380,413      $ 8.49

</TABLE>

     At August 26, 2000, August 28, 1999 and August 29, 1998, shares available
for granting of stock options under the Company's stock option plan were
5,343,695, 6,129,090 and 6,846,464 shares, respectively.


<PAGE>

9.  Common Stock:

Basic net income per common share is computed by dividing net income by
the weighted average number of shares outstanding during each period.
Diluted net income per common share gives effect to all securities
representing potential common shares that were dilutive and outstanding
during the period.  In the calculation of diluted net income per common
share, the denominator includes the number of additional common shares
that would have been outstanding if the Company's outstanding stock
options had been exercised.

On November 5, 1999, the Company announced that the Board of Directors
had authorized the purchase of up to 5,000,000 shares of its outstanding
common stock from time to time as market conditions warrant.  As of
August 26, 2000, the Company had purchased in the open market, 2,148,000
shares at a cost of $33,611,352.

The following table sets forth the computation of basic and diluted net
income per common share:

<TABLE>
<CAPTION>
                                        August 26,      August 28,      August 29,
                                           2000            1999            1998
<S>                                   <C>             <C>             <C>
Basic net income per share:

Net income                            $172,017,247    $140,079,267    $103,287,925
Weighted average number of shares
    outstanding                        171,697,772     172,511,199     172,008,335

Net income per common share - basic          $1.00            $.81            $.60

Diluted net income per share:

Net income                            $172,017,247    $140,079,267    $103,287,925

Weighted average number of shares
    outstanding                        171,697,772     172,511,199     172,008,335

Effect of dilutive securities -
    stock options                          951,015       1,323,151       1,215,300
Average shares - diluted               172,648,787     173,834,350     173,223,635

Net income per common share - diluted        $1.00            $.81            $.60

</TABLE>


<PAGE>

10.	Unaudited Summaries of Quarterly Results:

<TABLE>
<CAPTION>
                                           First            Second            Third         Fourth
                                          Quarter           Quarter          Quarter        Quarter
                                                    (In thousands, except per share data)

<S>                                      <C>                <C>              <C>            <C>
2000
Net sales.....................           $713,521           $858,500         $770,776       $789,842
Gross margin..................            247,341            284,135          272,434        251,813
Net income....................             36,583             54,981           50,131         30,322
Net income per
   common share*..............               $.21               $.32             $.29           $.18

1999
Net sales.....................           $628,016           $752,217         $678,858       $692,091
Gross margin..................            215,717            242,495          238,226        221,302
Net income....................             29,609             41,673           41,767         27,030
Net income per
   common share*..............               $.17               $.24             $.24           $.16

1998
Net sales.....................           $542,747           $635,877         $585,807       $597,499
Gross margin..................            186,327            199,179          200,116        187,653
Net income....................             24,327             27,597           31,343         20,021
Net income per
   common share.*.............               $.14               $.16             $.18           $.12

</TABLE>

* Figures represent both basic and diluted earnings per share.  The sum of
  the quarterly net income per common share may not equal the annual net
  income per common share due to rounding.