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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K
    FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTIONS 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

              ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002
                                       OR
            TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                         Commission file number 1-11735

                              99 CENTS ONLY STORES

             (Exact name of registrant as specified in its charter)

                 CALIFORNIA                              95-2411605
      (State or other Jurisdiction of                (I.R.S. Employer
       Incorporation or Organization)                Identification No.)

                           4000 UNION PACIFIC AVENUE,
                     CITY OF COMMERCE, CALIFORNIA     90023
             (Address of Principal Executive Offices)     (zip code)


       Registrant's telephone number, including area code: (323) 980-8145
           Securities registered pursuant to Section 12(b) of the Act:

      TITLE OF EACH CLASS              NAME OF EXCHANGE ON WHICH REGISTERED
      -------------------              ------------------------------------
        COMMON STOCK, NO PAR VALUE                NEW YORK STOCK EXCHANGE

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


     Indicate  by  check  mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Security 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  last  90  days.  Yes [X]  No [ ]

     Indicate  by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best  of  Registrant's  knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form  10-K. [X]

     Indicate  by  checkmark  whether the registrant is an accelerated filer (as
defined  in  Exchange  Act  Rule  12b-2)   Yes [X]  No [ ]

     The  aggregate  market  value of Common Stock held by non-affiliates of the
Registrant  on  June 28, 2002 was $1,213,783,600 based on a $25.65 closing price
for  the  Common  Stock  on  such  date.  For  purposes of this computation, all
executive  officers  and  directors  have  been  deemed  to  be affiliates. Such
determination  should  not  be  deemed  to  be  an admission that such executive
officers  and  directors  are,  in  fact,  affiliates  of  the  Registrant.

   Indicate the number of shares outstanding of each of the issuer's classes of
                    stock as of the latest practicable date.

       Common Stock, No Par Value, 70,426,655 Shares as of March 28, 2003

     Portions  of  Part  III  of this report have been incorporated by reference
from  the  Company's  Proxy  Statement for the 2003 Annual Shareholders meeting.

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                                      -1-
<PAGE>
<TABLE>
<CAPTION>
                                           TABLE OF CONTENTS


                                                 Part I                                          Page
                                                                                                 ----
<S>       <C>                                                                                    <C>
Item 1.   Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3
Item 2.   Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9
Item 3.   Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9
Item 4.   Submission of Matters to a Vote of Security Holders . . . . . . . . . . . . . . . . . .   9
Part II
Item 5.   Market for Registrant's Common Stock and Related Stockholder Matters. . . . . . . . . .  10
Item 6.   Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10
Item 7.   Management's Discussion and Analysis of Financial Condition and Results of Operations .  12
Item 7A.  Quantitative and Qualitative Disclosures About Market Risk. . . . . . . . . . . . . . .  21
Item 8.   Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . .  22
Item 9.   Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. .  37
Part III
Item 10.  Directors and Executive Officers of the Registrant. . . . . . . . . . . . . . . . . . .  38
Item 11.  Executive Compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  38
Item 12.  Security Ownership of Certain Beneficial Owners and Management. . . . . . . . . . . . .  38
Item 13.  Certain Relationships and Related Transactions. . . . . . . . . . . . . . . . . . . . .  38
Item 14.  Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  38
Part IV
Item 15.  Exhibits, Financial Statement Schedules and Reports on Form 8-K . . . . . . . . . . . .  39
</TABLE>


                                      -2-
<PAGE>
SPECIAL  NOTE  REGARDING  FORWARD-LOOKING  INFORMATION

     This  Report  contains  statements  that  constitute  "forward-looking
statements"  within  the  meaning of Section 21E of the Exchange Act and Section
27A  of  the  Securities  Act.  The  words  "expect,"  "estimate," "anticipate,"
"predict," "believe" and similar expressions and variations thereof are intended
to  identify  forward-looking  statements. Such statements appear in a number of
places  in  this  filing  and include statements regarding the intent, belief or
current  expectations of 99 Cents Only Stores (the " Company"), its directors or
officers  with respect to, among other things (a) trends affecting the financial
condition  or  results  of  operations  of  the Company and (b) the business and
growth  strategies of the Company. The shareholders of the Company are cautioned
not  to  put  undue  reliance  on  such  forward-looking  statements.  Such
forward-looking  statements are not guarantees of future performance and involve
risks  and  uncertainties,  and  actual results may differ materially from those
projected  in  this  Report,  for  the  reasons,  among others, discussed in the
Sections  -  "Management's  Discussion  and  Analysis of Financial Condition and
Results  of Operations" and "Risk Factors." The Company undertakes no obligation
to  publicly  revise  these  forward-looking  statements  to  reflect  events or
circumstances  that arise after the date hereof. Readers should carefully review
the  risk  factors  described  in other documents the Company files from time to
time  with  the  Securities  and  Exchange  Commission,  including the Quarterly
Reports  on  Form 10-Q and any Current Reports on Form 8-K filed by the Company.

                                     PART I

ITEM  1.  BUSINESS

     99 Cents Only Stores (the "Company") is a leading deep-discount retailer of
primarily name-brand, consumable general merchandise. The Company's stores offer
a  wide  assortment  of  regularly  available  consumer goods as well as a broad
variety  of  first-quality,  close-out  merchandise.  In 2002, a majority of the
Company's  product  offerings  were  comprised  of  recognizable  name-brand
merchandise  and were regularly available for reorder. As of March 28, 2003, the
Company  operated  154  retail stores, 116 in Southern California, 11 in Central
California,  7 in Northern California, 9 in Las Vegas, Nevada and 11 in Phoenix,
Arizona.  These stores have an average size of approximately 20,500 square feet.
The  Company's  99  Cents  Only Stores generated average net sales per estimated
saleable square foot of $309, which the Company believes is among the highest in
the deep-discount convenience store industry, and average net sales per store of
$4.8  million  for  stores  open  the  full  year  in  2002.

     The Company opened its first 99 Cents Only Stores in 1982 and believes that
it  operates the nation's oldest existing single price point general merchandise
chain.  The Company competes in the deep-discount industry, which it believes is
one of the fastest growing retail sectors in the United States. In line with the
Company's business strategy, the Company has significantly increased the rate of
store  expansion  over  the  last five fiscal years. The Company expanded its 99
Cents  Only  Stores from 36 stores and 332,100 estimated saleable square feet at
December  31, 1995 to 151 stores and 2,428,681 estimated saleable square feet at
December  31,  2002,  representing a compound annual growth rate ("CAGR") of 23%
and  33%,  respectively.  Historically,  the Company's 99 Cents Only Stores have
been  profitable  within  their first year of operation. In the first quarter of
2003, the Company opened three stores and plans to open an additional 35 net new
stores  during  the  remainder  of the year. The Company intends to continue its
planned store square footage expansion over the next several years at a targeted
growth  rate  of 25% per year. The Company estimates that the California, Nevada
and  Arizona  markets  have the potential for over 275 99 Cents Only Stores. The
Company  intends to continue to expand in California, Nevada and Arizona in 2003
and  will  enter  the  Texas  market  in 2003 as well. See "Growth Strategy" for
further  discussion  of  geographic  expansion  plans.

     The  Company  also sells merchandise through its Bargain Wholesale division
at  prices  generally  below  normal  wholesale  levels  to local, regional, and
national  discount,  drug  and  grocery  stores  and  independent  retailers,
distributors  and  exporters. Bargain Wholesale complements the Company's retail
operations  by  allowing  the  Company  to  purchase  in  larger volumes at more
favorable  pricing,  to  be exposed to a broader selection of opportunistic buys
and  to generate additional sales with relatively small incremental increases in
operating  expenses,  contributing  to  strong overall operating margins for the
Company.  Bargain Wholesale represented 7.0% of the Company's net sales in 2002.

INDUSTRY

     The  Company  participates  primarily in the deep-discount retail industry,
with  its 99 Cents Only Stores. Deep-discount retail is distinguished from other
retail  formats  by  the  purchase  of  close-out  and  other  special-situation
merchandise  at  prices  substantially  below  original  wholesale cost, and the
subsequent  sale  of  this  merchandise  at  prices  significantly below regular
retail.  This  results in a continually changing selection of specific brands of
products.  The Company believes that the deep-discount retail industry is one of
the  fastest  growing  retail  sectors  in  the  United  States.

     The sale of close-out or special-situation merchandise develops in response
to  the  need of manufacturers, wholesalers and others to distribute merchandise
outside  their  normal  channels.  Close-out  or  special-situation  merchandise
becomes  available  for  a  variety  of  reasons,  including  a  manufacturer's
over-production,  discontinuance  due  to  a  change  in  style,  color,  size,
formulation  or packaging, the inability to move merchandise effectively through
regular  channels,  reduction  of  excess seasonal inventory, discontinuation of
test-marketed  items  and  the  financial  needs  of  the  manufacturer.

     Many  deep-discount  retailers  also sell merchandise that can be purchased
from  a manufacturer or wholesaler on a regular basis. Although this merchandise
can  usually  be purchased at less than original wholesale and sold below normal
retail, the discount, if any, is generally less than with close-out merchandise.
Deep-discount  retailers sell regularly available merchandise to ensure a degree
of  consistency  in  their  product  offerings  and to establish themselves as a
reliable  source  of  basic  goods.


                                      -3-
<PAGE>
BUSINESS  STRATEGY

     The  Company's  goal  is  to  continue  to provide significant value to its
customers  on  a  wide  variety  of  consumable merchandise in an exciting store
environment.  The  Company's  strategies  to  achieve  this  goal  include  the
following:

     Focus  on  "Name-Brand"  Consumables.  The  Company  strives  to exceed its
customers'  expectations  of  the  range  and  quality  of name-brand consumable
merchandise  that  can  be  purchased  for  99  cents.  During 2002, the Company
purchased  merchandise from more than 999 suppliers, including Colgate-Palmolive
Company,  The  Dial  Corp.,  Eveready  Battery  Company  Inc.,  General Electric
Company,  Gerber Products Company, Hershey Foods Corp., Johnson & Johnson, Kraft
General  Foods, Inc., Lever Brothers Company, Mattel Inc., The Mead Corporation,
Nabisco  Inc.,  Nestle,  The  Pillsbury  Company,  The Procter & Gamble Company,
Revlon  Inc.  and  SmithKline  Beecham  Corporation.

     Broad  Selection  of  Regularly Available Merchandise. The Company's retail
stores  offer consumer items in each of the following staple product categories:
food  (including  frozen  and  deli  items),  beverages, health and beauty aids,
household  products (including cleaning supplies, paper goods, etc.), housewares
(including  glassware,  kitchen  items,  etc.),  hardware,  stationary and party
goods,  seasonal  goods,  baby  products  and  toys,  giftware, pet products and
clothing.  The Company supplements its name-brand merchandise with private-label
items.  By  consistently offering a wide selection of basic household consumable
items,  the  Company  attempts  to encourage customers to shop at the stores for
their  everyday  household  needs,  which  the  Company believes leads to a high
frequency  of  customer  visits.

     Attractively  Merchandised  and Well-Maintained Stores. The Company strives
to  provide  its  customers  an  exciting  shopping  experience  in
customer-service-oriented  stores, which are attractively merchandised, brightly
lit and well-maintained. The Company's stores are merchandised and laid out in a
"supermarket"  format  with  items  in  the  same  category grouped together. In
addition,  the  shelves  are  restocked  as  needed  during the day. By offering
merchandise  in  an attractive, convenient and familiar environment, the Company
believes  its  stores  appeal  to  a  wide  demographic  of  customers.

     Strong  Long-Term  Supplier Relationships. The Company believes that it has
developed  a  reputation  as a leading purchaser of name-brand, re-orderable and
close-out  merchandise  at discount prices through its ability to make immediate
buying  decisions, experienced buying staff, willingness to take on large volume
purchases and take possession of merchandise immediately, ability to pay cash or
accept  abbreviated  credit  terms, reputation for prompt payment, commitment to
honor  all  issued  purchase orders and willingness to purchase goods close to a
target season or out of season. The Company's relationship with its suppliers is
further  enhanced  by  its  ability  to  minimize  channel  conflict  for  the
manufacturer  by quickly selling name-brand merchandise without, if requested by
the  supplier,  advertising  or  wholesaling the item. Additionally, the Company
believes  it  has  well-maintained,  attractively  merchandised stores that have
contributed  to  a  reputation among suppliers for protecting their brand image.

     Complementary  Bargain  Wholesale  Operation. Bargain Wholesale complements
the  Company's  retail  operations by allowing the Company to purchase in larger
volumes  at  more  favorable  pricing,  to  be exposed to a broader selection of
opportunistic  buys  and  to  generate  additional  sales  with relatively small
incremental  increases  in  operating  expenses,  contributing to strong overall
operating  margins for the Company. Net sales in the Company's Bargain Wholesale
were  $50.0  million  in  2002.  The growth strategy for Bargain Wholesale is to
focus  on  large  domestic  and  international  accounts  and expansion into new
geographic markets. The Company maintains showrooms in New York City and Chicago
to  support  its  Bargain  Wholesale  operation,  which is based in Los Angeles.

     Adherence  to  Disciplined  Cost Controls and Savvy Purchasing. The Company
believes  it  is  able  to  provide  its  customers with significant value while
maintaining  strong operating margins through an adherence to a disciplined cost
control  program.  The Company purchases merchandise at substantially discounted
prices  as a result of its buyers' knowledge, experience and negotiating ability
and  its  established  reputation  among its suppliers. The Company applies this
same  approach to its relationships with other vendors and strives to maintain a
lean  operating  environment  focused  on  increasing  net  income.

     Focus on Larger Stores in Convenient Locations. The Company's 99 Cents Only
Stores are conveniently located in freestanding buildings, neighborhood shopping
centers  (anchored  by  99  Cents  Only Stores or co-anchored with a supermarket
and/or  a  drug  store),  regional shopping centers or downtown central business
districts  where  the  Company  believes  consumers  are more likely to do their
regular  household  shopping.  The  Company's 154 existing 99 Cents Only Stores,
average  approximately  20,500  gross  square feet. From January 1, 1997 through
December  31,  2002,  the  Company  has opened 115 new stores with an average of
approximately 20,500 gross square feet and currently targets new store locations
between  18,000 and 28,000 gross square feet. The Company's larger 99 Cents Only
Stores  allow  a  more  effective  display of a wider assortment of merchandise,
carry  deeper  stock  positions  and  provide customers with a more inviting and
convenient  environment  that  the Company believes encourages customers to shop
longer  and buy more. The Company's decision to target larger stores is based in
part  on  the  higher  average  annual  net sales per store and operating income
typically  achieved  by  these  stores.  In the past, as part of its strategy to
expand  retail  operations, the Company has at times opened larger new stores in
close  proximity  to existing stores where the Company determined that the trade
area  could  support  a  larger  store. In some of these situations, the Company
retained  its  existing  store so long as it continued to contribute store-level
operating  income.  While  this  strategy  was designed to increase revenues and
store-level  operating  income, it has had a negative impact on comparable store
net  sales  as some customers migrated from the existing store to the larger new
store.  The  Company  believes  that  this  strategy has impacted its historical
comparable  sales  growth.

     Experienced  Management  Team and Depth of Employee Option Grants. 99 Cents
Only  Stores'  management  team  has  many  years  of  retail experience and has
demonstrated  its skills through a proven track record of financial performance.
The  Company's  management  strongly  believes  that  employee  ownership of the
Company's  stock  helps  build employee pride in the stores, which significantly
contributes  to  the success of the Company and its operations. Accordingly, all
members  of the Company's management (other than David Gold, the Company's Chief
Executive  Officer,  Howard  Gold,  Senior  Vice President of Distribution, Jeff
Gold,  Senior  Vice  President  of  Real  Estate  and  Information Systems, Eric
Schiffer,  President  and  Karen  Schiffer, Senior Buyer) and all employees with
tenure  of  more  than  six  months  with the Company receive an annual grant of


                                      -4-
<PAGE>
stock  options. As of December 31, 2002, the Company's employees held options to
purchase  an  aggregate of 5,260,782 shares, or 7.5% of the fully diluted shares
of  Common  Stock  outstanding.

GROWTH  STRATEGY

     Management believes that future growth will primarily result from new store
openings  facilitated  by  the  following:

     Growth  in  Existing  Territories  -  California,  Nevada  and Arizona. The
Company's  154  99  Cents  Only  Stores  are  located  in California, Nevada and
Arizona. By focusing the majority of its 2003 growth in the current markets, the
Company  believes  it  can  leverage  its brand awareness in the region and take
advantage  of  its  existing  warehouse  and  distribution  facility,  regional
advertising  and  other management and operating efficiencies. The Company plans
to  open at least 38 net new 99 Cents Only Stores in 2003. Of the 38 planned net
new  stores,  at least 23 will be located in California, Nevada and Arizona. The
Company  opened three new stores during the first three months of 2003 and plans
to  open  the remaining stores planned for California, Nevada and Arizona during
the  remainder of 2003. The Company has secured sites for three additional store
locations  and  has  signed  twenty  letters  of  intent  to  lease  or purchase
prospective  store sites in these states. Generally, the Company expects that at
least  50% of the letters of intent will become store sites. The Company intends
to  continue  its  planned  store square footage expansion over the next several
years at a targeted rate of 25% per year. The Company estimates that the markets
in California, Nevada, and Arizona have the potential for over 275 99 Cents Only
Stores.

     Expansion  into  Texas.  On  February  4,  2003  the  Company announced the
purchase of a 741,000 square foot distribution center in Houston, to service its
planned  store  expansion in Texas in 2003 and beyond. The facility was acquired
for  $23  million  cash  and  is  fully racked including a pick to belt conveyor
system.  It also contains refrigerated and frozen storage space. The Company has
announced that it plans to open approximately 15 of its planned 38 new stores in
2003  in Houston and the surrounding areas. Currently the Company has a total of
11 letters of intent regarding leases for Houston locations.  In connection with
the  opportunity to acquire this warehouse facility, the Company accelerated its
retail  expansion plans into Texas to mid-year 2003 from early 2004. The Company
expects  that  additional  fixed  overhead  associated  with  this  distribution
facility  during  2003  will  be  approximately  $1.0  million  per quarter. The
Company  believes  Texas  has  the  potential  for  over  175  stores.

     Portable Format Facilitates Geographic Expansion. The Company believes that
its  concept  of  consistently  offering  a  broad  selection  of  name-brand
consumables,  at value pricing, in a convenient store format is portable to most
other  densely  populated  areas  of  the country. In November 1999, the Company
opened  its  first  99  Cents Only Stores outside the state of California in Las
Vegas,  Nevada  and  now  has a total of 9 stores in Las Vegas, Nevada and 11 in
Phoenix,  Arizona in 2002. As disclosed above, the Company also plans to add new
stores  in  Texas  in  2003.

      Acquisitions.  The  Company  considers  lease  acquisition  or  purchase
opportunities as they become known to the Company and may make acquisitions of a
chain,  or  chains,  of  clustered  retail  sites  in densely populated regions,
primarily  for  the  purpose  of  acquiring  favorable  locations.

RETAIL  OPERATIONS

     The  Company's retail stores offer customers a wide assortment of regularly
available consumer goods, as well as a broad variety of first-quality, close-out
merchandise,  generally  at  a  significant  discount  from  normal  retail. All
merchandise  sold  in the Company's 99 Cents Only Stores retail stores sells for
99  cents  per  item  or  99  cents  for  two  or  more  items.

     The  following  table  sets  forth relevant information with respect to the
growth of the Company's existing 99 Cents Only Stores operations (dollar amounts
in  thousands,  except  sales  per  square  foot):

<TABLE>
<CAPTION>
                                                                            YEAR ENDED DECEMBER 31,
                                                         -------------------------------------------------------------
                                                           1998        1999         2000         2001         2002
                                                         ---------  -----------  -----------  -----------  -----------
<S>                                                      <C>        <C>          <C>          <C>          <C>
99 Cents Only Stores net retail sales. . . . . . . . . . $238,868   $  312,306   $  402,071   $  522,019   $  663,983
99 Cents Only Stores annual net sales growth rate. . . .     28.4%        30.7%        28.7%        29.8%        27.2%
99 Cents Only Stores store count at beginning of year. .       53           64           78           98          123
New stores . . . . . . . . . . . . . . . . . . . . . . .       13           18           20           26           28
Stores closed. . . . . . . . . . . . . . . . . . . . . .      2(a)         4(a)           -          1(a)           -
                                                         ---------  -----------  -----------  -----------  -----------
Total store count at year-end. . . . . . . . . . . . . .       64           78           98          123          151
Average 99 Cents Only Stores net sales per store open
 the full year(b). . . . . . . . . . . . . . . . . . . . $  4,147   $    4,433   $    4,487   $    4,647   $    4,750
Estimated saleable square footage at year-end for 99
Cents Only Stores. . . . . . . . . . . . . . . . . . . .  822,900    1,102,369    1,424,280    1,892,949    2,428,681
Average net sales per estimated saleable square foot(b). $    335   $      332   $      318   $      319   $      309

Change in comparable 99 Cents Only Stores net sales. . .      4.3%         6.1%         2.0%         5.9%         3.2%
<FN>
(a)  Stores closed due to relocation to a larger nearby site.

(b)  For stores open for the entire fiscal year for 99 Cents Only Stores.
</TABLE>

     Merchandising.  All  of  the  Company's  stores  offer  a  broad variety of
first-quality,  name-brand  and  other  close-out  merchandise as well as a wide
assortment  of  regularly  available  consumer goods. The Company also carries a
line  of  private  label  consumer  products  made  exclusively  for  the


                                      -5-
<PAGE>
Company.  The  Company  believes  that  the  success of its 99 Cents Only Stores
concept  arises  from  the  value  inherent  in  selling  primarily  name-brand
consumables,  most  of  which  retail elsewhere from $1.19 to $9.99, for only 99
cents per item or group of items. Each store typically carries over six thousand
different  stock  keeping  units  (SKU).

     Although  a  majority  of  the  merchandise  purchased  by  the  Company is
available  for  reorder,  the  mix  of specific brands of merchandise frequently
changes,  depending  upon  the  availability  of  close-out  and  other
special-situation  merchandise at suitable prices. Since commencing its closeout
purchasing  strategy  in  1976,  the  Company  has not experienced difficulty in
obtaining name brand closeouts as well as re-orderable merchandise at attractive
prices.  Management  believes  that  continuously  changing specific name-brands
found  in  its  stores  from  one week to the next encourages impulse and larger
volume  purchases,  results  in  customers shopping more frequently and helps to
create  a  sense  of  urgency,  awareness  and  excitement. Unlike many discount
retailers,  the  Company  rarely imposes limitations on the quantity of specific
items  that  may  be  purchased  by  a  single  consumer.

     The  Company  targets  value-conscious  consumers  from  a  wide  range  of
socio-economic  backgrounds  with diverse demographic characteristics. Purchases
are  by cash, credit or debit card. The Company's stores do not accept checks or
manufacturers'  coupons.  The  Company's  stores are open every day with opening
hours  designated  to  meet  the  needs  of  family  consumers.

     Store Size, Layout and Locations. As of March 28, 2003, the Company had 154
99  Cents  Only  Stores  averaging approximately 20,500 gross square feet. Since
January 1, 1998, the Company has opened 106 new stores that average 22,600 gross
square  feet and currently targets new store locations between 18,000 and 28,000
gross  square  feet.  The Company's larger 99 Cents Only Stores allow it to more
effectively  display  a  wider  assortment  of  merchandise,  carry deeper stock
positions  and provide customers with a more, what management believes, inviting
and  convenient  environment  that  encourages  customers to shop longer and buy
more.  The Company's decision to target larger stores is based in part on higher
average  annual  store  revenues  typically  achieved  by  these  stores.

     The  Company's  stores  are conveniently located in freestanding buildings,
neighborhood  shopping  centers (anchored by 99 Cents Only Stores, a supermarket
and/or  a  drug  store),  regional shopping centers or downtown central business
districts  where  the  Company  believes  consumers  are more likely to do their
regular  household  shopping.

     The  Company  strives to provide stores that are attractively merchandised,
brightly  lit,  well-maintained,  "destination" locations. The layout of each of
the  Company's  stores is customized to the actual size and configuration of the
individual location. The interior of each store is, however, designed to reflect
a  uniform  format,  featuring  attractively  displayed  products  in  windows,
consistent  merchandise  display  techniques,  bright  lighting,  lower shelving
height  that  allows  unobstructed  visibility throughout the store, distinctive
color  scheme,  interior and exterior signage and customized check-out counters,
floors,  price  tags, shopping carts and shopping bags. The Company emphasizes a
strong  visual presentation in all key traffic areas of the store. Merchandising
displays  are  maintained  throughout  the  day,  change  frequently  and  often
incorporate  seasonal  themes. The Company believes that due to the continuously
changing  brand-names,  the  lower  shelving  height  and  the  absence of aisle
description  signs,  the  typical  customer  tends  to  shop  the  whole  store.

     As  of  December 31, the Company leased 129 of its 151 99 Cents Only Stores
retail  locations  and  owned  22  store  locations. The Company typically seeks
leases with an initial five-year to ten-year term and with one or more five-year
renewal options. See "Item 2 Properties." The Company identifies potential sites
through  a network of contacts within the brokerage and real estate communities,
information  provided  by  vendors,  customers  and  employees and through other
efforts  of  the  Company's  real  estate  department.  Most leases have renewal
options  ranging  from  three to ten years.  Except for 11 relocations to larger
stores,  the  Company  has  never  closed  any  of  its  99  Cents  Only Stores.

     Store  Management.  Substantially all merchandise decisions with respect to
pricing  and  advertising  are  made  at the Company's headquarters. The Company
employs  26  district  managers  and two regional managers responsible for store
operations.  Each  district  manager  is  responsible  for  up  to seven stores.
Reporting  to  each district manager is one merchandising supervisor responsible
for  store merchandising in that district. The store managers also report to the
district  manager.  These  district  managers are supervised by the two regional
managers  that  report  to  the  Company's  Vice President of Retail Operations.
District  managers  visit each store in their district at least twice a week and
focus  on  the  implementation  of  the  Company's  policies,  operations  and
merchandising philosophy. District managers also help train store management and
assist store management with scheduling. The Vice President of Retail Operations
also  supervises  a cashier's training school located at the Company's corporate
offices.  Each  merchandising  supervisor  and  his  crew  (usually  six  to ten
experienced stock people) visit each of the stores at least once a week and help
the  store  managers  to maintain and improve the appearance of the sales floor,
move  merchandise  sections,  organize  the stockroom and train store personnel.
Typically  the  Company's  stores  are  staffed  with a manager and two or three
assistant  managers.  Store  managers  are  responsible  for  assessing  their
respective  store's  stocking  needs  and  ordering  accordingly.

     Advertising.  Advertising  expenditures were $2.7 million, $3.4 million and
$3.1  million  for  2000, 2001 and 2002, respectively, or 0.6%, 0.6% and 0.4% of
net  sales,  respectively.  The  Company  manages  its  advertising  without the
assistance  of  an  outside  agency.  The  Company allocates the majority of its
advertising budget to newspaper and radio advertising. The Company's advertising
strategy  emphasizes  the  offering  of  nationally  recognized,  name-brand
merchandise  at  significant  savings.  The  Company  minimizes  its advertising
expenditures  by an efficient implementation of its advertising program combined
with  word-of-mouth  publicity,  locations  with  good  visibility and efficient
signage.  Because  of  the  Company's  distinctive  grand  opening  promotional
campaign, which includes the sale of nine televisions for 99 cents each and nine
microwave  ovens  for  99 cents each, grand openings often attract long lines of
customers  and  receive  media  coverage.  The  Company believes that one of its
biggest  challenges  is  attracting  affluent  customers to shop its stores. The
Company also uses a direct mail campaign for new customers who are homeowners in
more  upscale  neighborhoods.


                                      -6-
<PAGE>
BARGAIN  WHOLESALE

     Bargain  Wholesale  conducts  its  wholesale  operations through its 15,000
square foot product showroom located at the Company's warehouse and distribution
facility.  The  Company's  showrooms  in  New  York and Chicago also continue to
support  Bargain  Wholesale's  operations.  In  2002,  Bargain  Wholesale  sold
merchandise  to  other  wholesalers,  small  local retailers, large regional and
national  retailers and exporters. During 2002, no single customer accounted for
more  than  10.0%  of  Bargain Wholesale's net sales. The Company advertises its
wholesale  operations primarily through direct mail. The Company plans to expand
its  wholesale  operations  by  focusing  on  the  needs  of  large domestic and
international  accounts,  expansion  into new geographic markets, increasing its
marketing  and  promotional  programs,  increasing  the number of trade shows at
which  it  exhibits,  focusing  on  its  showrooms in Chicago and New York City,
enhancing  customer  service and aggressively contacting its customers on a more
frequent  basis  through  telephone,  facsimile  and  mail.

     The Company's wholesale product line is substantially similar to its retail
product  line.  Bargain  Wholesale  provides  merchandise  for  the  "dollar"
promotional  aisles  of  certain supermarkets and drugstores. The Company offers
15-day  payment  terms to its Bargain Wholesale customers who meet the Company's
credit  standards. Customers located abroad, certain smaller customers or others
who  do  not  meet  the  Company's credit standards must pay cash upon pickup or
before  shipment  of  merchandise.

     Bargain  Wholesale  complements the Company's retail operations by allowing
the  Company  to  purchase  in  larger  volumes at more favorable pricing, to be
exposed  to a broader selection of opportunistic buys and to generate additional
net  sales  with  relatively  small  incremental increases in operating expenses
contributing  to  strong overall margins for the Company. Bargain Wholesale also
allows  the  Company to purchase goods which it would not otherwise purchase for
distribution  through  its  99 Cents Only Stores and provides the Company with a
channel  by  which  it may distribute merchandise at prices other than 99 cents.

PURCHASING

     The  Company's purchasing department staff consists of 13 buyers managed by
the  Company's  Vice  President  of  Purchasing.  The  Company's Chief Executive
Officer  also participates in the Company's purchasing activities. The Company's
buyers  purchase  for  99  Cents  Only Stores and Bargain Wholesale. The Company
believes a primary factor contributing to its success is its ability to identify
and  take  advantage of opportunities to purchase merchandise with high customer
interest  at  lower than regular wholesale prices. The Company purchases most of
its  merchandise  directly from the manufacturer. The Company's other sources of
merchandise  include  wholesalers,  manufacturers'  representatives,  importers,
barter  companies,  auctions,  professional  finders  and  other  retailers. The
Company  develops  new  sources  of  merchandise primarily by attending industry
trade  shows,  advertising,  marketing  brochures  and  referrals.

     The Company has no continuing contracts for the purchase of merchandise and
must continuously seek out buying opportunities from both its existing suppliers
and  new  sources.  No  single  supplier  accounted  for  more  than 2.3% of the
Company's  total  purchases  in  2002.  During  2002,  the  Company  purchased
merchandise  from  more than 999 suppliers, including Colgate-Palmolive Company,
The  Dial Corp., Eveready Battery Company Inc., General Electric Company, Gerber
Products  Company,  Hershey  Foods Corp., Johnson & Johnson, Kraft General Foods
Inc.,  Lever  Brothers Company, Mattel Inc., The Mead Corporation, Nabisco Inc.,
Nestle,  The  Pillsbury  Company,  The Procter & Gamble Company, Revlon Inc. and
SmithKline  Beecham  Corporation.  Many  of  these companies have been supplying
products  for  the  Company  in  excess  of  fifteen  years.

     A  significant  portion of the merchandise purchased by the Company in 2002
was close-out or special-situation merchandise. The Company has developed strong
relationships  with many manufacturers and distributors who recognize that their
special-situation  merchandise can be moved quickly through the Company's retail
and  wholesale  distribution channels. The sale of closeout or special-situation
merchandise  develops  in response to the need of manufacturers, wholesalers and
others  to  distribute  merchandise outside their normal channels. The Company's
buyers search continuously for close-out opportunities. The Company's experience
and expertise in buying merchandise has enabled it to develop relationships with
many  manufacturers  that often offer some or all of their close-out merchandise
to  the  Company  prior to attempting to sell it through other channels. The key
elements  to  these  supplier relationships include the Company's (i) ability to
make  immediate  buy decisions, (ii) experienced buying staff, (iii) willingness
to  take  on  large  volume  purchases  and  take  possession  of  merchandise
immediately,  (iv)  ability  to pay cash or accept abbreviated credit terms, (v)
reputation  for  prompt  payment,  (vi)  commitment to honor all issued purchase
orders  and  (vii) willingness to purchase goods close to a target season or out
of  season.  The Company believes the relationship with its suppliers is further
enhanced  by  its  ability  to minimize channel conflict for the manufacturer by
quickly  selling  name-brand  merchandise without, if requested by the supplier,
advertising  or  wholesaling  the  item.

       In  2002,  re-orderable  merchandise  accounted  for  a  majority  of the
Company's  purchases. The Company's strong relationships with many manufacturers
and  distributors,  along  with  its  ability to purchase in large volumes, also
enable  the  Company  to  purchase  re-orderable  name-brand goods at discounted
wholesale  prices. The Company focuses its purchases of re-orderable merchandise
on a limited number of SKUs, which allows the Company to make purchases in large
volumes.

     The  Company is continuously developing new private label consumer products
to  broaden  the  assortment  of merchandise that is consistently available. The
Company  also  has  an  in-house  import  operation,  which  primarily purchases
re-orderable  merchandise.  The  Company imports products from various European,
South American and Asian countries. Merchandise directly imported by the Company
accounted  for  approximately  4.3%  of total merchandise purchased in 2002. The
Company  primarily  imports  merchandise in product categories which the Company
believes  are  not  brand  sensitive  to  consumers,  such  as  kitchen  items,
house-wares,  toys,  seasonal  products,  pet-care  and  hardware.


                                      -7-
<PAGE>
WAREHOUSING  AND  DISTRIBUTION

     The  Company  owns  an  880,000  square  foot,  single  level warehouse and
distribution facility located on approximately 23 acres in the City of Commerce,
California. The Company's headquarters are located in this facility. The Company
also  leases  an  additional  180,000  square  foot  of  warehouse storage space
adjacent  to  its  main distribution facility and 15,000 square feet of deli and
frozen  product  storage space. All of the three sites are located near downtown
Los  Angeles  and  have close access to the Southern California freeway and rail
systems  and  the  ports  of  Los  Angeles and Long Beach. The main distribution
facility  has  129  dock  doors available for receiving or shipping, and racking
with  over 10,000 pallet positions. Most of the Company's merchandise is shipped
by  truck  directly  from  manufacturers  and  other  suppliers to the Company's
warehouse  and distribution facility. The Company maintains a fleet of vehicles,
which  are  used to deliver merchandise to its stores. Full truck deliveries are
made  from its distribution center to each store typically three or more times a
week. Product is delivered to a store the day after the store places a scheduled
order.  The  Company  utilizes  its  fleet  by a combination of filling outbound
trucks  to  capacity  and  instituting a backhaul program whenever possible. The
Company  also  uses its own vehicles to pick up certain shipments at local ports
and  rail yards. The size of the Company's distribution center allows storage of
bulk  one-time  close-out  purchases  and  seasonal  or  holiday  items  without
incurring  additional costs. The Company believes that its current warehouse and
distribution  facilities  will  be able to support distribution to approximately
200  stores  in  California  and areas within a 450 mile radius. There can be no
assurance  that  the  Company's existing warehouse will provide adequate storage
space  for  the  Company's  long-term  storage  needs.

      On February 4, 2003 the Company announced the purchase of a 741,000 square
foot  distribution  center  near  Houston,  Texas,  to service its planned store
expansion  in  Texas  in  2003  and  beyond.  The Company believes Texas has the
potential  for  over  175  stores  and that this facility can adequately support
those  stores.  See  "Growth  Strategy  -  Expansion  into  Texas."

INFORMATION  SYSTEMS

     In  2002,  the Company completed the installation of the first phase of its
financial,  accounting,  human  resource  and  payroll  system which utilizes an
INFORMIX  database  to  run  on  an  IBM UNIX operating system. The Company also
operates  a separate IBM UNIX based inventory control system developed in house.
The  Company's proprietary store ordering system, which utilizes radio frequency
hand  held  scanning devices, continued to be upgraded in 2002. This system also
has  improved  the  overall  order  processing  turn  around time as well as the
inventory  availability  in  the  stores and is processed using a back office PC
system  at  each retail location. The Company utilizes a Wide Area Network (WAN)
for  voice  and  data  communications  among  the  stores, the warehouse and the
administrative  functions.  In  February  2002,  the  Company  completed  the
implementation  of  its  Point of Sale System (POS) in all 99 Cents Only Stores.
The  system  has  expedited  the customer check-out process and provided product
category  sales  data  necessary  to  better  service the Company's customers by
improving  the information about the in stock inventory at the  individual store
level.  The Company's information systems staffing consists of 15 employees. The
Company  believes  that its management information systems and inventory control
systems  along  with  future initiatives to upgrade warehouse management systems
will  be adequate to support the Company's current needs. The Company intends to
continue  to  enhance its systems to support its future planned store growth and
to  take  advantage  of  new  proven  technology.

COMPETITION

     The Company faces competition in both the acquisition of inventory and sale
of  merchandise  from  other  wholesalers,  discount  stores, single price point
merchandisers,  mass  merchandisers,  food markets, drug chains, club stores and
other  retailers.  Industry competitors also include a large number of privately
held  companies  and  individuals.  In some instances these competitors are also
customers  of  the  Company's  Bargain  Wholesale  division. There is increasing
competition  with other wholesalers and retailers, including other deep-discount
retailers,  for  the  purchase  of quality close-out and other special-situation
merchandise.  Some  of  these  competitors  have substantially greater financial
resources  and  buying  power than the Company. The Company's ability to compete
will  depend on many factors including the success of its purchase and resale of
such  merchandise  at  lower  prices  than the competition. The Company may face
intense  competition in the future from new entrants in the deep-discount retail
industry,  among  others,  that  could  have  an adverse effect on the Company's
business  and  results  of  operations.

EMPLOYEES

     At  December 31, 2002, the Company had 5,985 employees: 5,331 in its retail
operation,  460 in its warehouse and distribution facility, 180 in its corporate
offices  and  14  in  its  Bargain  Wholesale  division.  None  of the Company's
employees  is  party to a collective bargaining agreement. The Company considers
relations  with  its  employees to be good. The Company offers certain benefits,
including  health  insurance,  401(k) benefits to its full time employees and an
executive  deferred  compensation  plan.  All  members of management (other than
David  Gold,  the  Company's  Chief  Executive Officer, Howard Gold, Senior Vice
President  of  Distribution, Jeff Gold, Senior Vice President of Real Estate and
Information  Systems, Eric Schiffer, President and Karen Schiffer, Senior Buyer)
and  all  full-time employees with tenure of six months, receive an annual grant
of  stock  options.

TRADEMARKS  AND  SERVICE  MARKS

     "99  Cents  Only  Stores",  "99  Cents", "Rinso" and "Halsa" are registered
trademarks  of  the  Company  and  are  listed  on  the United States Patent and
Trademark  Office Principal Register. "Bargain Wholesale" is a service mark used
by the Company. Management believes that the Company's trademarks, service marks
and  trade  names  are  an  important  but not critical element of the Company's
merchandising  strategy.


                                      -8-
<PAGE>
ENVIRONMENTAL  MATTERS

     Under  various federal, state and local environmental laws and regulations,
a  current  or previous owner or occupant of real property may become liable for
the  costs  of  removal  or  remediation  of  hazardous  substances at such real
property.  Such  laws  and  regulations often impose liability without regard to
fault.  As  of  March 28, 2003 the Company leased 131 of its 154 existing stores
and  the  Company  owned its main California warehouse and distribution facility
(where  its  executive  offices  are located). The Company also owns a warehouse
facility  in  Eagan,  Minnesota  that  is  currently  leased  to  Universal
International,  a  former  subsidiary  of  the  Company. In connection with such
properties,  the  Company could be held liable for the costs of remedial actions
with  respect  to  hazardous  substances.  In addition, the Company operates one
underground  diesel  storage  tank  and  one  above-ground  propane  tank at its
warehouse  and distribution facility. Although the Company has not been notified
of, and is not otherwise aware of, any specific current environmental liability,
claim  or non-compliance, there can be no assurance that the Company will not be
required  to  incur  remediation or other costs in the future in connection with
its  leased properties or its storage tanks or otherwise. In the ordinary course
of  its  business, the Company from time to time handles or disposes of ordinary
household  products  that  are  classified  as hazardous materials under various
federal,  state  and  local  environmental laws and regulations. The Company has
adopted  policies regarding the handling and disposal of these products, and has
implemented  a training program for employees on hazardous material handling and
disposal.  There  can  be  no assurance, however, that such policies or training
will  be  successful  in  assisting  the  Company  in  avoiding  violations  of
environmental laws and regulations relating to the handling and disposal of such
products  in  the  future.

AVAILABLE  INFORMATION

     The  Company makes available free of charge its annual report on Form 10-K,
quarterly  reports  on  Form  10-Q  and  current  reports  on Form 8-K through a
hyperlink  from the "Investor Relations" portion of its website, www.99only.com,
                                                                 --------------
to  the Securities and Exchange Commission's website, www.sec.gov.  Such reports
                                                      -----------
should  be  available on the same day that they are electronically filed with or
furnished  to  the  Securities  and  Exchange  Commission  by  the  Company.

ITEM  2.  PROPERTIES

     As  of March 28, 2003, the Company owned 23 and leased 131 of its 154 store
locations. The Company also has escrow deposits on four additional locations for
future  openings.  The Company currently leases 12 store locations and a parking
lot  associated with one of these stores from the Gold Family. Our annual rental
expense  for  these  facilities totaled approximately $1.9 million, $1.9 million
and $2.2 million in 2000, 2001 and 2002, respectively. We believe that our lease
terms are just as favorable to us as they would be for an unrelated party. Under
our  current  policy, we enter into real estate transactions with our affiliates
only  for  the renewal or modification of existing leases and on occasions where
we  determine  that  such  transactions are in our best interests. Moreover, the
independent  members of our Board of Directors must unanimously approve all real
estate transactions between us and our affiliates. They must also determine that
such transactions are equivalent to a negotiated arm's-length transaction with a
third  party.  We  cannot  guarantee that we will reach agreements with the Gold
family  on  renewal terms for the properties we currently lease from them. Also,
even  if  we  agree  to  such  terms,  we cannot be certain that our independent
directors  will  approve them. If we fail to renew one of these leases, we could
be  forced to relocate or close the leased store. Any relocations or closures we
experience  will  be  costly and could adversely affect our business. One of our
outside directors, Ben Schwartz, is a trustee of a trust that owns a property on
which  a  single  99  Cents Only Stores is located. Management believes that the
Company's  stable  operating  history,  excellent  credit history and ability to
generate substantial customer traffic give the Company significant leverage when
negotiating  lease  terms. Most of the Company's leases provide for fixed rents,
subject  to  periodic adjustments. Certain of the Company's store leases contain
provisions  that  grant  the  Company  a  right  of first refusal to acquire the
subject  site.

     The  following  table  sets  forth,  as  of  December 31, 2002, information
relating  to  the  expiration  dates  of  the  Company's  current stores leases:

     EXPIRING   EXPIRING   EXPIRING      EXPIRING
     2003       2004-2006  2007-2009  2010 AND BEYOND
     ---------  ---------  ---------  ---------------
       7(a)        49         35            39

(a)  Includes two stores leased on a month-to-month basis.

     The Company purchased its main warehouse, distribution and executive office
facility,  located in the City of Commerce, California in 2000. The Company also
leases  an additional 180,000 square feet of warehouse storage space adjacent to
its main distribution facility and 15,000 square feet of deli and frozen product
storage  space  which  is  also  located  in  the  vicinity.

     On February 4, 2003 the Company acquired a 741,000 square foot distribution
center  in  Houston, to service its planned store expansion in Texas in 2003 and
beyond.  See  "Growth  Strategy  -  Expansion  in  Texas."

ITEM  3.  LEGAL  PROCEEDINGS

     The  Company  is  periodically subject to legal actions, which arise in the
ordinary  course  of its business. The Company does not believe that any pending
action  is  material  to  its  results  of  operations  or  financial condition.

ITEM  4.  SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITY  HOLDERS

     None.


                                      -9-
<PAGE>
                                     PART II

ITEM  5.  MARKET  FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     The  Company's  Common Stock is traded on the New York Stock Exchange under
the  symbol  "NDN."  The  following  table  sets forth, for the calendar periods
indicated,  the  high  and  low  closing prices per share of the Common Stock as
reported  by the New York Stock Exchange. All stock prices have been restated to
reflect  a  four-for-three  stock split effected in the form of a stock dividend
distributed  on  April  3,  2002.

                                            Price Range
                                           --------------
                                            High    Low
                                           ------  ------
     2001:
     -----
     First Quarter. . . . . . . . . . . .  $19.93  $13.35
     Second Quarter . . . . . . . . . . .   23.04   16.28
     Third Quarter. . . . . . . . . . . .   27.38   20.03
     Fourth Quarter . . . . . . . . . . .   29.86   23.52
     2002:
     -----
     First Quarter. . . . . . . . . . . .  $28.75  $24.86
     Second Quarter . . . . . . . . . . .   32.60   24.91
     Third Quarter. . . . . . . . . . . .   25.49   20.70
     Fourth Quarter . . . . . . . . . . .   29.80   20.31
     2003:
     -----
     First Quarter through March 28, 2003  $28.48  $20.83


     As  of  March 28, 2003, the Company had approximately 22,422 holders of the
Common  Stock  including  534  shareholders  of  record.

     The  Company  has  not  paid  any cash dividends with respect to the Common
Stock.  The  Company  presently intends to retain future earnings to finance its
development  and  expansion and therefore does not anticipate the payment of any
cash  dividends  in the foreseeable future. Payment of future dividends, if any,
will  depend  upon  future  earnings and capital requirements of the Company and
other  factors,  which  the  Board  of  Directors  considers  appropriate.

     The  Company  has  one  stock option plan (the 1996 Stock Option Plan). The
plan  is  a  fixed  plan,  which  provides for the granting of non-qualified and
incentive  options  to purchase up to 17,000,000 shares of common stock of which
6,199,566  are  available  for  future  option grants. Options may be granted to
officers,  employees,  directors  and  consultants. Grants may be at fair market
value  at  the  date  of  grant  or  at  a  price determined by the compensation
committee  consisting  of  four  outside  members of the board of directors (the
"Committee"). Options vest over a three-year period, one-third one year from the
date  of  grant and one third per year thereafter. Options expire ten years from
the  date  of  grant.  The  Company accounts for its stock option plan under APB
Opinion  No.  25  under which no compensation cost has been recognized in fiscal
2000,  2001  and  2002.

ITEM  6.  SELECTED  FINANCIAL  DATA

     The  following  table  sets forth, selected financial and operating data of
the Company for the periods indicated. The Consolidated Financial Statements for
years 1998 through 2001 were audited by Arthur Andersen LLP (Andersen) which has
ceased  operations.  A  copy  of the report previously issued by Andersen on our
financial  statements as of December 31, 2000 and 2001 and for each of the three
years  in  the period ended December 31, 2001 is included elsewhere in this Form
10-K.  Such  report has not been reissued by Andersen. The following information
should be read in conjunction with "Item 7. Management's Discussion and Analysis
of  Financial  Condition  and  Results  of  Operations"  and  "Item 8. Financial
Statements  and  Supplementary  Data"  of the Company and notes thereto included
elsewhere  in  this  Form  10-K.

<TABLE>
<CAPTION>
                                                                YEAR ENDED DECEMBER 31
                                                -----------------------------------------------------
                                             (Amounts in thousands, except per share and operating data)
Statements of Income Data:                        1998       1999       2000       2001       2002
                                                ---------  ---------  ---------  ---------  ---------
<S>                                             <C>        <C>        <C>        <C>        <C>
Net sales:
    99 Cents Only Stores. . . . . . . . . . .   $238,868   $312,306   $402,071   $522,019   $663,983
    Bargain Wholesale (e) . . . . . . . . . .     53,202     47,652     49,876     56,250     49,959
                                                ---------  ---------  ---------  ---------  ---------
  Total sales . . . . . . . . . . . . . . . .    292,070    359,958    451,947    578,269    713,942
Cost of sales . . . . . . . . . . . . . . . .    183,044    218,496    275,395    350,421    427,356
                                                ---------  ---------  ---------  ---------  ---------
Gross profit. . . . . . . . . . . . . . . . .    109,026    141,462    176,552    227,848    286,586
Selling, general and administrative expenses:
    Operating expenses. . . . . . . . . . . .     62,424     80,089    107,981    141,544    178,374
    Depreciation and amortization . . . . . .      4,506      5,927      8,666     12,354     17,711
                                                ---------  ---------  ---------  ---------  ---------
   Total operating expenses . . . . . . . . .     66,930     86,016    116,647    153,898    196,085
Operating income. . . . . . . . . . . . . . .     42,096     55,446     59,905     73,950     90,501
Other (income) net. . . . . . . . . . . . . .     (1,428)    (1,059)    (3,617)    (5,931)    (4,847)
                                                ---------  ---------  ---------  ---------  ---------
</TABLE>


                                      -10-
<PAGE>
<TABLE>
<CAPTION>
                                          (CONTINUED FROM PREVIOUS PAGE)
                                                                          AS OF DECEMBER 31
                                                     -------------------------------------------------------------
                                                     (Amounts in thousands, except per share and operating data)


                                                       1998        1999         2000         2001         2002
                                                     ---------  -----------  -----------  -----------  -----------
<S>                                                  <C>        <C>          <C>          <C>          <C>
Income from continuing operations before provision
for income taxes . . . . . . . . . . . . . . . . .     43,524       56,505       63,522       79,881       95,348
Provision for income taxes . . . . . . . . . . . .     17,032       22,367       24,664       31,438       36,374
                                                     ---------  -----------  -----------  -----------  -----------
Income from continuing operations. . . . . . . . .   $ 26,492   $   34,138   $   38,858   $   48,443   $   58,974
                                                     ---------  -----------  -----------  -----------  -----------

Income (loss) from discontinued operations net of
  income tax provision of $910 in 1998 and
  income tax benefit of $2,111 and $700 in 1999
  and 2000 respectively. . . . . . . . . . . . . .        201       (3,167)      (1,050)           -            -

(Loss) on disposal of discontinued operations
  including a provision of $1,200 for operating
  losses during phase-out period, net of income
  tax benefit of $2,613. . . . . . . . . . . . . .          -       (9,000)           -            -            -
                                                     ---------  -----------  -----------  -----------  -----------

Net income . . . . . . . . . . . . . . . . . . . .   $ 26,693   $   21,971   $   37,808   $   48,443   $   58,974
                                                     =========  ===========  ===========  ===========  ===========
Earnings per common share from continuing
operations (d):
    Basic. . . . . . . . . . . . . . . . . . . . .   $   0.41   $     0.51   $     0.58   $     0.70   $     0.84
    Diluted. . . . . . . . . . . . . . . . . . . .   $   0.40   $     0.50   $     0.56   $     0.69   $     0.83
(Loss) per common share from discontinued
operations (d):
    Basic. . . . . . . . . . . . . . . . . . . . .          -       ($0.05)      ($0.02)           -            -
    Diluted. . . . . . . . . . . . . . . . . . . .          -       ($0.05)      ($0.02)           -            -
(Loss) per common share from disposal of
discontinued operations (d):
    Basic. . . . . . . . . . . . . . . . . . . . .          -       ($0.13)           -            -            -
    Diluted. . . . . . . . . . . . . . . . . . . .          -       ($0.13)           -            -            -
Earnings per common share (d):
    Basic. . . . . . . . . . . . . . . . . . . . .   $   0.42   $     0.33   $     0.56   $     0.70   $     0.84
    Diluted. . . . . . . . . . . . . . . . . . . .   $   0.41   $     0.32   $     0.55   $     0.69   $     0.83
Weighted average number of common shares
outstanding:
    Basic. . . . . . . . . . . . . . . . . . . . .     64,075       66,487       67,650       68,815       69,938
    Diluted. . . . . . . . . . . . . . . . . . . .     65,486       67,954       68,945       70,009       71,181
COMPANY OPERATING DATA:
-----------------------
Sales Growth
    99 Cents Only Stores . . . . . . . . . . . . .       28.4%        30.7%        28.7%        29.8%        27.2%
    Bargain Wholesale (e). . . . . . . . . . . . .       18.7%      (10.4)%         4.7%        12.8%      (11.2)%
    Total Company sales. . . . . . . . . . . . . .       26.5%        23.2%        25.6%        28.0%        23.5%
Gross margin . . . . . . . . . . . . . . . . . . .       37.3%        39.3%        39.1%        39.4%        40.1%
Operating margin . . . . . . . . . . . . . . . . .       14.4%        15.4%        13.3%        12.8%        12.7%
Income from continuing operations: . . . . . . . .        9.1%         9.5%         8.6%         8.4%         8.3%

RETAIL OPERATING DATA (A):
--------------------------
99 Cents Only Stores at end of period. . . . . . .         64           78           98          123          151
Change in comparable stores
Net sales (b). . . . . . . . . . . . . . . . . . .        4.3%         6.1%         2.0%         5.9%         3.6%
Average net sales per store open the full year . .   $  4,147   $    4,433   $    4,487   $    4,647   $    4,750
Average net sales per estimated saleable square
 foot (c). . . . . . . . . . . . . . . . . . . . .   $    335   $      332   $      318   $      319   $      309
Estimated saleable square footage at year end. . .    822,900    1,102,369    1,424,280    1,892,949    2,428,681
</TABLE>


                                      -11-
<PAGE>
<TABLE>
<CAPTION>
                                     (CONTINUED FROM PREVIOUS PAGE)
                                                                      AS OF DECEMBER 31,
                                                       ------------------------------------------------
                                                 (Amounts in thousands, except per share and operating data)

                                                         1998      1999      2000      2001      2002
                                                       --------  --------  --------  --------  --------
<S>                                                    <C>       <C>       <C>       <C>       <C>
Balance Sheet Data:
  Working capital. . . . . . . . . . . . . . . . . . . $ 81,439  $105,637  $166,779  $194,302  $206,486
  Total assets . . . . . . . . . . . . . . . . . . . .  194,167   224,015   277,285   352,158   439,910
  Capital lease obligation, including current portion     8,005     7,251         -     1,677     1,637
  Total shareholders' equity . . . . . . . . . . . . . $164,365  $195,540  $253,533  $319,643  $396,615
<FN>

(a)  Includes  retail  operating  data  solely  for  the Company's 99 Cents Only
     Stores.

(b)  Change  in  comparable  stores  net sales compares net sales for all stores
     open  at  least  15  months.

(c)  Computed  based upon estimated total saleable square footage of stores open
     for  the  entire  period.

(d)  All  earnings  per  share  amounts  have  been  restated  to  reflect  the
     four-for-three  stock  split  distributed  on  April  3,  2002.

(e)  In 1998, Bargain Wholesale sales includes $12.0 million inter-company sales
     to  Universal  billed at cost. In 2001 Bargain Wholesale sales include $4.7
     million  of  sales  to  Universal  billed  at  a  10%  mark-up
</TABLE>

ITEM  7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF  OPERATIONS.

     The  following  management's  discussion  and  analysis  should  be read in
connection  with  "Item  6.  Selected  Financial  Data,"  and "Item 8. Financial
Statements  and  Supplementary  Data."

GENERAL

     99  Cents  Only  Stores  has  increased its net sales, operating income and
income  from  continuing  operations in each of the last five years. In 2002, it
had  net  sales  of $713.9 million, operating income of $90.5 million and income
from  continuing  operations  of  $59.0 million, representing a 23.5%, 22.4% and
21.7%  increase over 2001, respectively. From 1998 through 2002, the Company had
a  compound  annual  growth  rate in net sales, operating income and income from
continuing  operations  of  25.3%,  23.7%  and  25.5%,  respectively.

     During  the three years in the period ending December 31, 2002, average net
sales  per estimated saleable square foot (computed on 99 Cents Only Stores open
for  a  full  year)  declined from $319 per square foot to $309 per square foot.
This  trend  reflects the Company's determination to target larger locations for
new store development. Existing stores average approximately 20,500 gross square
feet.  From January 1, 2000 through December 31, 2002, the Company opened 74 new
stores  (including  one  relocation  in  2001) that average approximately 22,500
gross  square  feet.  The  Company currently targets new store locations between
18,000  and  28,000  gross  square feet. Although it is the Company's experience
that  larger  stores generally have lower average net sales per square foot than
smaller  stores,  larger  stores  generally  achieve higher average annual store
revenues  and  operating  income.

CRITICAL  ACCOUNTING  POLICIES  AND  ESTIMATES

     The  preparation  of  financial  statements  requires  management  to  make
estimates  and  assumptions  that  affect reported earnings. These estimates and
assumptions  are  evaluated  on  an  on-going  basis and are based on historical
experience  and  on  other  factors  that  management  believes  are reasonable.
Estimates and assumptions include, but are not limited to, the areas of customer
receivables,  inventories,  self-insurance  reserves,  and  commitments  and
contingencies.

     The  Company  believes  that  the  following represent the areas where more
critical  estimates and assumptions are used in the preparation of the financial
statements:

     Investments:  The  Company  records  its  investments,  which are comprised
primarily  of investment grade federal and municipal bonds and commercial paper,
at  fair  value.  Any  premium  or  discount  recognized  in connection with the
purchase  of  an  investment  is  amortized over the term of the investment. The
Company accounts for its investments in marketable securities in accordance with
Financial  Accounting  Standards  Board  No.  115  as  trading  securities.

     Long-lived  asset  impairment:  The  Company  records  impairments when the
carrying  amounts  of  long-lived  assets  are determined not to be recoverable.
Impairment is assessed and measured by an estimate of future cash flows expected
to  result  from  the  use of the asset and its eventual disposition. Changes in
market  conditions  can  impact  estimated  future  cash flows from use of these
assets  and  additional  impairments  may be required should such changes occur.

     Self-insurance  reserves:  The  Company  is  self-insured  in  relation  to
worker's  compensation claims in California.  The Company provides for losses of
estimated  known and incurred but not reported insurance claims. These estimates
are  based  on  reported  claims  and  actuarial  valuations.


                                      -12-
<PAGE>
Should  a  greater  amount  of  claims occur compared to the estimates, reserves
recorded  may  not  be  sufficient  and  additional  expenses,  which  may  be
significant,  could  be  incurred.

UNIVERSAL  INTERNATIONAL  (DISCONTINUED  OPERATIONS)

     In  December 1999, the Company determined it would be in its best interest,
and that of its shareholders, to focus its efforts on increasing the growth rate
of  99  Cents  Only Stores. In conjunction with its revised growth strategy, the
Company  decided  to  sell  its Universal International, Inc. and Odd's-n-End's,
Inc. subsidiaries (together "Universal"). Universal operated a multi-price point
variety  chain, with 65 stores located in the Midwest, Texas and New York, under
the  trade names Only Deals and Odd's-N-End's. Among other factors at that time,
the  Company considered its successful opening of its first 99 Cents Only Stores
outside  the state of California, in Las Vegas, Nevada. Given the success of the
Las  Vegas,  Nevada  stores,  the Company believed that the 99 Cents Only Stores
concept  was portable to areas outside the state of California. As a result, the
Company  has focused greater management resources to increasing its store growth
rate  and  has expanded more rapidly in Nevada and Arizona and will be expanding
into  Texas  in  2003.

     The Company adopted a definitive plan to sell Universal within one year, as
set forth by guidelines for the accounting treatment of discontinued operations.
The  Company  engaged  an  investment-banking  firm  to  evaluate  and  identify
potential  buyers  for  the  Universal  business  and expected to sell Universal
within  the one-year time frame. The investment banking firm's marketing process
focused  upon  selling  the  business as a going concern. From June 2000 through
August  2000,  sales  presentations  were delivered to both strategic buyers and
financial buyers. This process did not generate the expected interest level from
potential  buyers that had been anticipated. The highest offer for the Universal
business  was significantly less than the Company's expectations. As a result of
the  difficulties  encountered  in trying to sell Universal and the necessity to
complete  the  process  by  December  31,  2000,  it was decided by the Board of
Directors  to  be  in  the Company's and the shareholders' best interest to sell
Universal  for  the  Company's  carrying  value  as  of the close of business on
September  30,  2000 to Universal Deals, Inc. and Universal Odd's-n-End's, Inc.,
both  of  which  are  owned  100%  by  David  and  Sherry Gold, both significant
shareholders  of  99  Cents Only Stores. Mr. Gold is also Chairman and CEO of 99
Cents  Only  Stores.  The  sale  was  effective  as  of the close of business on
September  30,  2000.  The purchase price for Universal was paid in cash and was
equal  to  the  Company's  carrying  book  value  of  the assets of Universal at
September  30,  2000  or  $33.9  million.  The  net assets at September 30, 2000
included  $29.2  million in inventory, net fixed assets of $7.6 million and $0.6
million  of  other  assets. These assets were offset by $3.5 million of accounts
payable,  accrued and other liabilities. In connection with this transaction, 99
Cents  Only Stores provided certain ongoing administrative services to Universal
in  2000  and 2001 pursuant to a service agreement for a management fee of 6% of
Universal  sales  revenues.  During  fiscal  year  2000, the Company recorded an
additional  net  loss  from  discontinued operations of $1.1 million, net of tax
benefit of $0.7 million, for operating losses incurred through the date of sale,
in  excess  of the amounts originally provided in 1999. In the fourth quarter of
2000,  the  Company  received  $1.3 million in management fees under the service
agreement  with  Universal.  The  Company  also  received  $0.4 million in lease
payments  for  rental  of a distribution facility to Universal. During 2001, the
Company  received $3.7 million in fees under the service agreement, $1.4 million
in lease payments and sold $4.7 million in merchandise at a 10% mark-up. In 2002
the Company received $1.5 million in management fees under the service agreement
from  Universal  and  $1.4  million  in  lease  payments. It also purchased $0.4
million  of  closeout  inventory  from  Universal.  Resolution of Universal post
closing  business issues has required the extension of the service agreement and
lease  arrangement with 99 Cents Only Stores to a date ending some time in 2003.

     The  following table sets forth for the periods indicated, certain selected
income  statement  data,  including  such  data  as  a  percentage of net sales:

<TABLE>
<CAPTION>
                                                                YEARS ENDED DECEMBER 31
                                               ------------------------------------------------------
                                                                (Amounts in thousands)

                                                 2000               2001               2002
                                               ---------          ---------          ---------
<S>                                            <C>        <C>     <C>        <C>     <C>        <C>
Net Sales:
99 Cents Only Stores. . . . . . . . . . . . .  $402,071    89.0%  $522,019    90.3%  $663,983    93.0%
Bargain Wholesale . . . . . . . . . . . . . .    49,876    11.0     56,250     9.7     49,959     7.0
                                               ---------  ------  ---------  ------  ---------  ------
Total . . . . . . . . . . . . . . . . . . . .   451,947   100.0    578,269   100.0    713,942   100.0
Cost of sales . . . . . . . . . . . . . . . .   275,395    60.9    350,421    60.6    427,356    59.9
                                               ---------  ------  ---------  ------  ---------  ------
Gross profit. . . . . . . . . . . . . . . . .   176,552    39.1    227,848    39.4    286,586    40.1
Selling, general and administrative expenses:
Operating expenses. . . . . . . . . . . . . .   107,981    23.9    141,544    24.5    178,374    24.9
Depreciation and amortization . . . . . . . .     8,666     1.9     12,354     2.1     17,711     2.5
                                               ---------  ------  ---------  ------  ---------  ------
Total . . . . . . . . . . . . . . . . . . . .   116,647    25.8    153,898    26.6    196,085    27.4
Operating income. . . . . . . . . . . . . . .    59,905    13.3     73,950    12.8     90,501    12.7
Other (income) expense, net . . . . . . . . .    (3,617)   (0.8)    (5,931)   (1.0)    (4,847)   (0.7)
                                               ---------  ------  ---------  ------  ---------  ------
Income from continuing operations before
 provision for income taxes . . . . . . . . .    63,522    14.1     79,881    13.8     95,348    13.4
Provision for income taxes. . . . . . . . . .    24,664     5.5     31,438     5.4     36,374     5.1
                                               ---------  ------  ---------  ------  ---------  ------
Income from continuing operations . . . . . .    38,858     8.6     48,443     8.4     58,974     8.3
(Loss) from discontinued operations, net of
  income tax benefit of $700 in 2000. . . . .    (1,050)   (0.2)         -       -          -       -
                                               ---------  ------  ---------  ------  ---------  ------
Net income. . . . . . . . . . . . . . . . . .  $ 37,808     8.4%  $ 48,443     8.4%  $ 58,974     8.3%
                                               =========  ======  =========  ======  =========  ======
</TABLE>


                                      -13-
<PAGE>
YEAR ENDED DECEMBER 31, 2002 COMPARED TO YEAR ENDED DECEMBER 31, 2001

     Net  Sales. Total net sales increased $135.7 million, or 23.5%, from $578.3
million  in  2001  to  $713.9  million  in  2002. 99 Cents Only Stores net sales
increased  $142.0  million,  or  27.2%,  from  $522.0  million in 2001 to $664.0
million  in  2002. Bargain Wholesale net sales decreased $6.3 million, or 11.2%,
from  $56.3  million  in 2001 to $50.0 million in 2002. The increase in 99 Cents
Only  Stores  net sales was attributed to the net effect of 28 new stores opened
in  2002  and  the  full year effect of 25 net stores opened in 2001. Comparable
stores  net  sales  increased  3.6%  from  2001  to  2002. Net sales in 2003 are
expected  to  be favorably impacted by the full year effect of the 28 new stores
opened  in  2002  (constituting an increase in 536,000 saleable square feet) and
the  estimated  38  new  99 Cents Only Stores expected to be opened in 2003. The
decrease  in Bargain Wholesale net sales was primarily attributed to the absence
of  sales  to  Universal,  which  were  $4.7  million  in  2001.

     Gross profit. Gross profit, which consists of total net sales, less cost of
sales,  increased $58.7 million, or 25.8%, from $227.8 million in 2001 to $286.6
million  in  2002.  The  increase  in  gross profit dollars was primarily due to
higher  sales  volume.  As  a percentage of net sales, gross profit was 40.1% in
2002  versus  39.4%  in 2001. This 0.7% variation results from the change in the
ratio  of  retail  versus  wholesale sales. The retail gross margin increased to
41.7%  of  sales  in 2002 versus 41.6% in 2001. This was due to product cost and
mix  factors.  The wholesale margin was 20.1% in 2002 versus 19.3% in 2001. This
change  resulted  from  the absence of $4.7 million in sales to Universal, which
carried  a  contract  margin  of  10%.

     Selling,  general  and  administrative. Selling, general and administrative
expenses  ("SG&A"),  which  include  operating  expenses  and  depreciation  and
amortization,  increased $42.2 million, or 27.4%, from $153.9 million in 2001 to
$196.1  million  in  2002. The increase over 2001 is associated with fiscal year
2002  new  store growth and the full year effect of 2001 new store additions and
an  incremental  provision  for  workers  compensation  of  $2.2  million.  SG&A
increased  as a percentage of net sales from 26.6% in 2001 to 27.4% in 2002. The
increase  in SG&A expenses in 2002 was offset by $1.5 million in management fees
from  Universal  (see  Universal  International above). The increases in SG&A in
2002  were  directly  attributable  to 28 new store openings and to increases in
utility  costs,  minimum  wage  increases and the additional field and corporate
support staff hired to support the future new store growth and expansion outside
of the state of California. Additional key staff positions were filled in retail
management,  information systems, real estate, distribution, human resources and
buying.

     Operating  income. Operating income increased $16.6 million, or 22.4%, from
$74.0 million in 2001 to $90.5 million in 2002. Operating income as a percentage
of  net  sales was 12.8% in 2001 and 12.7% in 2002 primarily due to the increase
in  the  operating  costs  discussed  above.

     Other  (income)  expense.  Other  (income) expense relates primarily to the
interest  income on the Company's marketable securities, net of interest expense
on  the  Company's capitalized leases. Interest expense was $0.1 million in 2001
and  in  2002. The Company had no bank debt during 2002 or 2001. Interest income
earned  on the Company's marketable securities was $3.5 million in 2002 and $4.6
million  in  2001.  At  December  31,  2002,  the Company held $146.9 million in
short-term investments and $37.2 million in long-term investments. The Company's
short-term  investments  are comprised primarily of investment grade federal and
municipal  bonds  and  commercial  paper,  all  with  short-term maturities. The
Company  generally  holds investments until maturity. Also included in both 2002
and  2001 is $1.4 million of income under a lease agreement with Universal for a
distribution  facility.

     Provision  for  income  taxes.  The  provision for income taxes in 2002 was
$36.4  million,  or 5.1% of net sales, compared to $31.4 million, or 5.4% of net
sales  in  2001. The effective combined federal and state rates of the provision
for  income  taxes  were  39.3%  and  38.1%  in 2001 and 2002, respectively. The
effective combined federal and state tax rates are less than the statutory rates
in  each  period and were calculated to reflect estimated tax rates after giving
effect  for  tax  credits  and  the  estimated  versus  the  actual  tax  rate
differential.  See  Note  6  of  "Notes  to  Financial  Statements."

     Net  Income.  As  a  result  of  the items discussed above, net income from
continuing  operations  increased $10.5 million, or 21.7%, from $48.4 million in
2001  to $59.0 million in 2002. Net income as a percentage of net sales was 8.3%
in  2002  and  8.4%  in  2001.

YEAR ENDED DECEMBER 31, 2001 COMPARED TO YEAR ENDED DECEMBER 31, 2000

     Net  Sales. Total net sales increased $126.4 million, or 28.0%, from $451.9
million  in  2000  to  $578.3  million  in  2001. 99 Cents Only Stores net sales
increased approximately $119.9 million, or 29.8%, from $402.1 million in 2000 to
$522.0 million in 2001. Bargain Wholesale net sales increased approximately $6.4
million,  or  12.8%,  from  $49.9  million in 2000 to $56.3 million in 2001. The
increase  in  99 Cents Only Stores net sales was attributed to the net effect of
25 net new stores opened in 2001 and the full year effect of 20 stores opened in
2000. Comparable stores net sales increased 5.9% from 2000 to 2001. Net sales in
2002 are expected to be favorably impacted by the full year effect of the 25 net
new  stores  opened in 2001 (constituting an increase in 469,000 saleable square
feet)  and  the  estimated  32 new 99 Cents Only Stores expected to be opened in
2002.  The  increase  in Bargain Wholesale net sales was primarily attributed to
$4.7  million  in  shipments  to  Universal.

     Gross profit. Gross profit, which consists of total net sales, less cost of
sales,  increased  approximately $51.2 million, or 29.0%, from $176.6 million in
2000  to  $227.8  million  in  2001.  The  increase  in gross profit dollars was
primarily due to higher sales volume. As a percentage of net sales, gross profit
was  39.4%  in  2001  versus 39.1% in 2000. This 0.3% variation results from the
ratio  of  retail  versus  wholesale sales. The retail gross margin increased to
41.6%  of  sales  in 2001 versus 41.3% in 2000. This was due to product cost and
mix  factors.  The wholesale margin was 19.3% in 2001 versus 21.0% in 2000. This
change  results  from  the  $4.7 million in shipments to Universal at a contract
margin  of  10%.

     Selling,  general  and  administrative. Selling, general and administrative
expenses  ("SG&A"),  which  include  operating  expenses  and  depreciation  and
amortization,  increased $37.3 million, or 32.0%, from $116.6 million in 2000 to
$153.9  million in 2001. The increase over 2000 is associated with year 2001 new
store  growth  and the full year effect of fiscal year 2000 new stores additions
and  an  incremental  provision  for  workers compensation of $1.8 million. SG&A
increased  as a percentage of net sales from 25.8% in 2000 to 26.6% in 2001. The
increase  in SG&A expenses in 2001 was offset by $3.7 million in management fees
from  Universal  (see  Universal  International above). The increases in SG&A in
2001  were


                                      -14-
<PAGE>
directly  attributable  to 25 net new store openings and to increases in utility
costs,  minimum  wage  increases  and the additional field and corporate support
staff  hired to support the future new store growth and expansion outside of the
state  of  California.  Additional  key  staff  positions  were filled in retail
management,  information systems, real estate, distribution, human resources and
buying.

     Operating  income. Operating income increased $14.1 million, or 23.5%, from
$59.9 million in the 2000 period to $74.0 million in 2001. Operating income as a
percentage of net sales was 13.3% in 2000 and 12.8% in 2001 primarily due to the
increase  in  the  operating  costs  discussed  above.

     Other  (income)  expense.  Other  (income) expense relates primarily to the
interest  income on the Company's marketable securities, net of interest expense
on  the  Company's capitalized leases. Interest expense was $0.7 million in 2000
and  $0.1  million  in  2001.  The Company had no bank debt during 2001 or 2000.
Interest  income  earned on the Company's marketable securities was $4.6 million
in  2001 and $4.0 million in 2000. At December 31, 2001, the Company held $147.6
million in short-term investments and $0.5 million in long-term investments. The
Company's  short-term  investments  are  comprised primarily of investment grade
federal  and  municipal  bonds  and  commercial  paper,  all  with  short-term
maturities.  The  Company  generally  holds  investments  until  maturity.  Also
included  in  2001  and  2000  is $1.4 million and $0.4 million respectively, of
income  under  a  lease  agreement  with  Universal for a distribution facility.

     Provision  for  income  taxes.  The  provision for income taxes in 2001 was
$31.4  million,  or 5.4% of net sales, compared to $24.7 million, or 5.5% of net
sales  in  2000. The effective combined federal and state rates of the provision
for  income  taxes  were  39.4%  and  38.8%  in 2001 and 2000, respectively. The
effective  combined federal and state rates are less than the statutory rates in
each  period  due  to  the benefit of certain tax-exempt interest and welfare to
work  tax  credits.  See  Note  6  of  "Notes  to  Financial  Statements."

     Income  from  continuing  operations.  As  a  result of the items discussed
above,  net  income from continuing operations increased $9.5 million, or 24.4%,
from  $38.9  million  in  2000  to $48.4 million in 2001. Income from continuing
operations  as  a  percentage  of  net  sales was 8.4% in 2001 and 8.6% in 2000.

     Discontinued  operations.  The  Board  of  Directors  approved  the sale of
Universal for an amount equal to the carrying value of the Company's investment,
$33.9  million,  as  of the close of business on September 30, 2000. The Company
recorded an additional loss from discontinued operations of $1.1 million, net of
tax  benefit  of  $0.7 million, for Universal and Odd's-n-End's operating losses
incurred  through the date of sale, in excess of the amounts originally provided
in  1999.  No additional losses for the discontinued operations were recorded in
2001.

     Net Income.  As a result of the items discussed above, net income increased
$10.6  million,  or  28.1%, from $37.8 million in 2000 to $48.4 million in 2001.
Net  income  as  a  percentage  of  net  sales  was  8.4%  in  2001  and  2000.

LIQUIDITY  AND  CAPITAL  RESOURCES

     Since  inception,  the  Company  has funded its operations principally from
cash  provided by operations, and has not generally relied upon external sources
of financing. The Company's capital requirements result primarily from purchases
of  inventory,  expenditures  related  to new store openings and working capital
requirements  for  new  and  existing  stores.  The  Company  takes advantage of
close-out  and other special-situation opportunities, which frequently result in
large  volume  purchases,  and  as  a consequence, its cash requirements are not
constant  or  predictable  during the year and can be affected by the timing and
size  of  its  purchases.

     Net  cash  provided  by operations during 2001 and 2002 was $67.1 and $72.3
million,  respectively,  consisting primarily of $64.2 million and $78.3 million
of  net  income  adjusted for non-cash items. In 2001, the Company provided $3.0
million  in  working  capital and other activities and in 2002, the Company used
$5.5  million  in working capital and other activities. Net cash used in working
capital  and other activities primarily reflects the increases in inventories in
the  amount  of  $2.8  million and $16.6 million in 2001 and 2002, respectively.

     Net  cash  used  in investing activities during 2001 and 2002 was $87.4 and
$77.5  million.  Net cash used in investing activities represents the following:
In  2001,  the  Company  used  $46.9  million  for  the purchase of property and
equipment  (including  $17.9  million  used  for  the  purchase  of  new  store
locations),  $4.7  million in investments in two partnerships for the purpose of
obtaining  leases  on  two store locations and $35.8 million for the purchase of
short-term  investments.  The Company did not repurchase any of its shares under
its  stock  repurchase  program in 2001, which expired during 2002. In 2002, the
Company used $41.6 million for the purchase of property and equipment (including
$19.6  million  for  the purchase of new store locations) and used $36.0 million
for  the  purchase  of  short-term  investments.

     Net  cash  provided  by financing activities during 2001 and 2002 was $11.4
and  $12.9  million,  which  represents  the  proceeds  from  the  exercise  of
non-qualified stock options. The Company does not maintain any credit facilities
with  any  bank.  However, the Company maintains a cash deposit of approximately
$6.7  million  for  self-insured  workers  compensation.

     The  Company plans to open 38 new 99 Cents Only Stores in 2003. The average
investment  per  new  store  opened  in  2002, including leasehold improvements,
furniture,  fixtures  and  equipment,  inventory  and  pre-opening expenses, was
approximately  $660,000.  The  Company does not capitalize pre-opening expenses.
The  Company's  cash  needs  for  new  store  openings  are  expected  to  total
approximately $37.0 million in 2003 including acquired properties. The Company's
total  planned  expenditures  in  2003  for  additions to fixtures and leasehold
improvements  of existing stores as well as for distribution, systems, expansion
and  replacement  will be approximately $10.0 million. The Company believes that
its  total  capital expenditure requirements (including new store openings) will
approximate  $47.0  million  in  2003. The Company intends to fund its liquidity
requirements  in  2003  out  of  net  cash  provided  by  operations, short-term
investments  and cash on hand. In addition to the above planned expenditures, on
February  4,  2003  the  Company announced the purchase of a 741,000 square foot
distribution  center in Houston, to service its planned store expansion in Texas
in  2003  and  beyond.  The facility was acquired for $23 million in cash and is
fully  racked  including  a  pick  to  belt  conveyor


                                      -15-
<PAGE>
system.  It  also  contains  built in refrigerated and frozen storage space. The
Company  has  announced  that  it  plans to open approximately 15 of its planned
total  38  new  store  additions  in  2003  in the Houston and surrounding area.

CONTRACTUAL  OBLIGATIONS

     The following table summarizes our consolidated contractual obligations (in
thousands)  as  of  December  31, 2002. These should be read in conjunction with
"Note  8.  Commitments  and  Contingencies"

<TABLE>
<CAPTION>
Contractual Obligations       2003     2004     2005     2006     2007    Thereafter    Total
                             -------  -------  -------  -------  -------  -----------  --------
<S>                          <C>      <C>      <C>      <C>      <C>      <C>          <C>
Capital Lease Obligations    $   169  $   169  $   169  $   169  $   169  $     1,525  $  2,370
Operating Lease Obligations   21,829   20,714   18,207   15,432   11,650       38,611   126,443
                             -------  -------  -------  -------  -------  -----------  --------
                             $21,998  $20,883  $18,376  $15,601  $11,819  $    40,136  $128,813
                             =======  =======  =======  =======  =======  ===========  ========
</TABLE>

LEASE  COMMITMENTS

     The  Company  leases  various  facilities under operating leases except for
two,  which  were  classified as capital leases and will expire at various dates
through  2018.  Some  of  the  lease  agreements  contain renewal options and/or
provide  for scheduled increases or increases based on the Consumer Price Index.
Total  minimum  lease  payments  under each of these lease agreements, including
scheduled increases, are charged to operations on a straight-line basis over the
life  of  each  respective lease. Certain leases require the payment of property
taxes,  maintenance and insurance. Rental expense charged to operations in 2000,
2001  and 2002 was approximately $15.6 million, $19.4 million and $24.9 million,
respectively.  The  Company  typically seeks leases with an initial five-year to
ten-year  term  and  with  one  or  more five-year renewal options. See "Item 2.
Properties."  Most  leases have renewal options ranging from three to ten years.

SEASONALITY  AND  QUARTERLY  FLUCTUATIONS

     The  Company  has  historically  experienced  and  expects  to  continue to
experience some seasonal fluctuations in its net sales, operating income and net
income.  The  highest  sales  periods  for  the  Company  are  the Christmas and
Halloween seasons. A greater amount of the Company's net sales and operating and
net  income  is  generally  realized  during  the  fourth quarter. The Company's
quarterly  results of operations may also fluctuate significantly as a result of
a  variety  of  other  factors,  including the timing of certain holidays (e.g.,
Easter)  and  the  timing  of  new  store  openings  and  the  merchandise  mix.

SUPPLEMENTARY  FINANCIAL  INFORMATION

The  following table sets forth certain unaudited results of operations for each
quarter during 2001 and 2002. The unaudited information has been prepared on the
same  basis  as  the  audited  financial  statements appearing elsewhere in this
report  and includes all adjustments, which management considers necessary for a
fair  statement  of  the  financial  data  shown.  The operating results for any
quarter  are  not  necessarily  indicative of the results to be attained for any
future  period. All earnings per share amounts have been restated to reflect the
four-for-three  stock  split  distributed  on  April  3,  2002.

<TABLE>
<CAPTION>
                                        YEAR ENDED DECEMBER 31, 2001               YEAR ENDED DECEMBER 31, 2002
                                ------------------------------------------  ------------------------------------------
                                                     (Amounts in thousands except per share data)

                                   1ST        2ND        3RD        4TH        1ST        2ND        3RD        4TH
                                 QUARTER    QUARTER    QUARTER    QUARTER    QUARTER    QUARTER    QUARTER    QUARTER
                                ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------
<S>                             <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>
Net sales:
   99 Cents Only Stores. . . .  $110,212   $122,522   $130,799   $158,486   $149,647   $155,436   $160,424   $198,476
   Bargain Wholesale . . . . .    14,758     13,852     13,223     14,417     13,457     12,426     11,839     12,237
     Total . . . . . . . . . .   124,970    136,374    144,022    172,903    163,104    167,862    172,263    210,713
Gross profit . . . . . . . . .    48,071     53,179     56,271     70,327     64,242     67,564     68,755     86,025
Operating income . . . . . . .    14,605     16,465     16,763     26,117     19,320     21,024     20,607     29,550
Income from continuing
operations . . . . . . . . . .     9,964     10,929     11,168     16,382     12,470     13,519     13,255     19,730
Net income . . . . . . . . . .  $  9,964   $ 10,929   $ 11,168   $ 16,382   $ 12,470   $ 13,519   $ 13,255   $ 19,730

Earnings per common share
from continuing operations:
   Basic . . . . . . . . . . .  $   0.14   $   0.16   $   0.16   $   0.24   $   0.18   $   0.19   $   0.19   $   0.28
   Diluted . . . . . . . . . .  $   0.14   $   0.16   $   0.16   $   0.23   $   0.18   $   0.19   $   0.19   $   0.28


                                      -16-
<PAGE>
(CONTINUED FROM PREVIOUS PAGE)
Net earnings per share:
   Basic . . . . . . . . . . .  $   0.14   $   0.16   $   0.16   $   0.24   $   0.18   $   0.19   $   0.19   $   0.28
   Diluted . . . . . . . . . .  $   0.14   $   0.16   $   0.16   $   0.23   $   0.18   $   0.19   $   0.19   $   0.28
Shares outstanding:
   Basic . . . . . . . . . . .    68,403     68,506     68,995     69,325     69,558     69,888     70,043     70,278
   Diluted . . . . . . . . . .    69,183     69,499     70,369     70,780     70,925     71,275     71,217     71,362
Percent of net sales:
Net sales:
   99 Cents Only Stores. . . .      88.2%      89.8%      90.8%      91.7%      91.7%      92.6%      93.1%      94.2%
   Bargain Wholesale . . . . .      11.8       10.2        9.2        8.3        8.3        7.4        6.9        5.8
      Total. . . . . . . . . .     100.0      100.0      100.0      100.0      100.0      100.0      100.0      100.0
Gross profit . . . . . . . . .      38.5       39.0       39.1       40.7       39.4       40.2       39.9       40.8
Operating income . . . . . . .      11.7       12.1       11.7       15.1       11.8       12.5       12.0       14.0
Income from continuing
operations . . . . . . . . . .       8.0%       8.0%       7.8%       9.5%       7.6%       8.1%       7.7%       9.4%
</TABLE>

NEW  AUTHORITATIVE  PRONOUNCEMENTS

     In  June  2001,  the  FASB  approved  two  final  statements: SFAS No. 141,
"Business  Combinations," which provides guidance on the accounting for business
combinations  and  was  effective  July 1, 2001, and SFAS No. 142, "Goodwill and
Other  Intangible  Assets,"  which  defines  when  and  how  goodwill  and other
intangible  assets  are amortized and was effective as of January 1, 2002. These
statements did not have an impact on the Company's financial position or results
of  operations.

     In  June  2001,  the  FASB  issued  SFAS  No.  143,  "Accounting  for Asset
Retirement  Obligations"  (SFAS  143).  This  statement  addresses  financial
accounting  and  reporting  for  obligations  associated  with the retirement of
tangible long-lived assets and the associated asset retirement cost. SFAS 143 is
effective  for financial statements issued for fiscal years beginning after June
15,  2002.  The  adoption  of  SFAS  143 did not have an impact on the Company's
financial  position  or  results  of  operations.

     In  August  2001,  the  FASB  issued  SFAS  No.  144,  "Accounting  for the
Impairment  or  Disposal  of  Long-Lived  Assets"  (SFAS  144).  This  statement
addresses  financial  accounting and reporting for long-lived assets and retains
requirements  to  recognize  an  impairment  loss  if  the carrying value is not
recoverable  from  its undiscounted cash flows and to measure an impairment loss
as  the  difference  between the carrying value and the fair value of the asset.
SFAS  144  was  effective  for  the financial statements issued for fiscal years
beginning after December 15, 2001 and interim periods within those fiscal years.
The  adoption  of  SFAS  144  did  not have an impact on the Company's financial
position  or  results  of  operations.

     In  June  2002,  the  FASB  issued  SFAS  No.  146,  "Accounting  for Costs
Associated  with  Exit  or  Disposal  Activities"  (SFAS  146).  This  statement
requires  the  recognition  of costs associated with exit or disposal activities
when  they  are  incurred  rather than at the date of a commitment to an exit or
disposal  plan.  This  statement  is  effective  for exit or disposal activities
initiated  after  December 31, 2002 and is not expected to materially impact the
Company.

     In  November  2002,  the  Financial  Accounting Standards Board issued FASB
Interpretation  No.  45, "Guarantor's Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of Others" ("FIN 45").
FIN  45  requires  a  guarantor  to  recognize a liability at the inception of a
guarantee equal to the fair value of the obligation undertaken and elaborates on
the disclosures to be made by the guarantor.  The disclosure requirements of FIN
45  are  required  for the fiscal year ended December 31, 2002.  The recognition
and  measurement provisions of FIN 45 are effective, on a prospective basis, for
guarantees  issued by the Company beginning in fiscal 2003.  The adoption of FIN
45 is not expected to have a material impact on the Company's financial position
or  results  of  operations.

     In  December,  2002,  the  FASB  issued  SFAS  No.  148,  "Accounting  for
Stock-Based Compensation -- Transition and Disclosure" (SFAS 148) - an amendment
of  SFAS  123  "Accounting  for  Stock  -Based  Compensation".  The  standard is
intended to encourage the adoption of the accounting provisions of SFAS 123.  It
is  also  intended  to address constituent concerns about the so-called "ramp-up
effect"  on  net  income  that  resulted  from the application of the transition
guidance  originally  required by SFAS 123. The transition and annual disclosure
provisions  of SFAS 148 are effective for fiscal years ending after December 15,
2002.  Under  the  provisions  of  SFAS  148, companies that choose to adopt the
accounting  provisions  of  SFAS  123  will  be  permitted  to select from three
transition  methods.  The  Company  continues  to recognize stock based employee
compensation  under  APB  Opinion  No.  25.

RISK  FACTORS

INFLATION MAY AFFECT OUR ABILITY TO SELL MERCHANDISE AT THE 99 CENTS PRICE POINT

     The  Company's ability to provide quality merchandise at the 99 cents price
point  is  subject  to  certain economic factors, which are beyond the Company's
control,  including inflation. Inflation could have a material adverse effect on
the  Company's  business  and  results  of  operations,  especially  given  the
constraints  on  the  Company  to  pass  on  any  incremental costs due to price
increases or other factors. The Company believes that it will be able to respond
to  ordinary  price increases resulting from inflationary pressures by adjusting
the number of items sold at the single price point (e.g., two items for 99 cents
instead  of  three  items  for  99  cents)  and  by  changing  its  selection of
merchandise.  Nevertheless,  a  sustained  trend


                                      -17-
<PAGE>
 of  significantly  increased inflationary pressure could require the Company to
abandon  its  single  price  point  of  99  cents  per  item, which could have a
     material  adverse  effect  on  the  Company's  business  and  results  of
operations.  See  also  "We  are  vulnerable  to  uncertain economic factors and
changes  in  the minimum wage" for a discussion of additional risks attendant to
inflationary  conditions.

WE DEPEND ON NEW STORE OPENINGS FOR FUTURE GROWTH

     Our operating results depend largely on our ability to open and operate new
stores  successfully  and  to manage a larger business profitably. In 2000, 2001
and 2002, we opened 20, 26 and 28 99 Cents Only Stores, respectively (20, 25 and
28  stores  respectively,  net  of  relocated  stores). As of March 28, 2003, we
opened three stores and expect to open 35 additional stores during the remainder
of 2003 to meet a growth rate of 25%. We also plan to grow retail square footage
at  a  rate of approximately 25% per year. Our strategy depends on many factors,
including our ability to identify suitable markets and sites for our new stores,
negotiate  leases with acceptable terms, refurbish stores, upgrade our financial
and  management  information  systems  and  controls  and  manage  our operating
expenses.  In addition, we must be able to continue to hire, train, motivate and
retain  competent managers and store personnel. Many of these factors are beyond
our  control.  As a result, we cannot assure you that we will be able to achieve
our  expansion  goals.  Any  failure  by  us to achieve our expansion goals on a
timely basis, obtain acceptance in markets in which we currently have limited or
no  presence,  attract  and  retain  management  and  other qualified personnel,
appropriately  upgrade  our  financial  and  management  information systems and
control or manage operating expenses could adversely affect our future operating
results  and  our  ability  to  execute  our  business  strategy.

     We  also  cannot  assure you that we will improve our results of operations
when  we  open new stores. A variety of factors, including store location, store
size,  rental  terms,  the  level  of  store  sales  and  the  level  of initial
advertising  influence if and when a store becomes profitable. Assuming that our
planned  expansion  occurs  as  anticipated,  our  store  base  will  include  a
relatively  high proportion of stores with relatively short operating histories.
We  cannot  assure  you  that our new stores will achieve the sales per saleable
square foot and store-level operating margins currently achieved at our existing
stores.  If our new stores on average fail to achieve these results, our planned
expansion could produce a decrease in our overall sales per saleable square foot
and  store-level  operating  margins.  Increases in the level of advertising and
pre-opening  expenses  associated  with  the  opening  of  new stores could also
contribute  to  a decrease in our operating margins. Finally, the opening of new
stores  in  existing markets has in the past and may in the future reduce retail
sales of existing stores in those markets, negatively affecting comparable store
sales.

OUR OPERATIONS ARE CONCENTRATED IN CALIFORNIA

     Currently,  all  but  20  of  our  99  Cents  Only  Stores  are  located in
California.  The Company operates nine stores in Las Vegas, Nevada and 11 stores
in  Arizona. The Company expects that it will continue to open additional stores
in California, as well as in Nevada, Arizona and Texas. Accordingly, our results
of  operations  and  financial  condition  largely  depend  upon  trends  in the
California  economy.  If  retail  spending declines due to economic slow-down or
recession  in  California,  we cannot assure you that our operations will not be
negatively  impacted.

     In addition, California historically has been vulnerable to certain natural
disasters  and  other  risks,  such  as  earthquakes,  fires,  floods  and civil
disturbance.  At  times,  these  events  have disrupted the local economy. These
events  could  also  pose  physical  risks  to  our  properties.

WE COULD EXPERIENCE DISRUPTIONS IN RECEIVING AND DISTRIBUTION

     Our  success  depends upon whether our receiving and shipment schedules are
organized  and  well  managed.  As  we  continue to grow, we may face unexpected
demands  on  our  warehouse  operations,  as  well  as unexpected demands on our
transportation  network,  which could cause delays in delivery of merchandise to
or  from  our  warehouses to our stores. A fire, earthquake or other disaster at
our  warehouses  could  hurt  our  business,  financial condition and results of
operations,  particularly  because much of our merchandise consists of closeouts
and  other  irreplaceable  products.  Although we maintain standard property and
business  interruption  insurance,  we  do  not have earthquake insurance on our
properties.  Although  we try to limit our risk of exposure to potential product
liability  claims,  we  do  not  know  if  the limitations in our agreements are
enforceable.  We maintain insurance covering damage from use of our products. If
any  product  liability claim is successful and large enough, our business could
suffer.

WE DEPEND UPON OUR RELATIONSHIPS WITH OUR SUPPLIERS AND THE AVAILABILITY OF
CLOSE-OUT AND SPECIAL-SITUATION MERCHANDISE

     Our  success  depends  in  large part on our ability to locate and purchase
quality  close-out  and special-situation merchandise at attractive prices. This
helps  us  maintain  a  mix  of name-brand and other merchandise at the 99 cents
price  point.  We  cannot  be  certain that such merchandise will continue to be
available  in  the  future.  Further,  we  may  not be able to find and purchase
merchandise in quantities necessary to accommodate our growth. Additionally, our
suppliers  sometimes  restrict  the  advertising,  promotion  and  method  of
distribution  of  their merchandise. These restrictions in turn may make it more
difficult  for  us  to  quickly sell these items from our inventory. Although we
believe  our relationships with our suppliers are good, we do not have long-term
agreements  with any supplier. As a result, we must continuously seek out buying
opportunities  from  our existing suppliers and from new sources. We compete for
these  opportunities  with  other  wholesalers  and  retailers,  discount  and
deep-discount chains, mass merchandisers, food markets, drug chains, club stores
and  various privately-held companies and individuals. Although we do not depend
on  any  single  supplier  or group of suppliers and believe we can successfully
compete  in  seeking  out  new  suppliers,  a  disruption in the availability of
merchandise  at  attractive  prices  could  impair  our  business.

WE PURCHASE IN LARGE VOLUMES AND OUR INVENTORY IS HIGHLY CONCENTRATED

     To obtain inventory at attractive prices, we take advantage of large volume
purchases,  close-outs  and other special situations. As a result, our inventory
levels are generally higher than other discount retailers. At December 31, 2000,
2001  and  2002,  we  recorded net inventory of $63.7 million, $66.5 million and
$83.2  million  respectively. We periodically review the net realizable value of
our  inventory  and make adjustments to its carrying value when appropriate. The
current carrying value of our inventory reflects our belief that we will realize
the  net  values  recorded  on  our


                                      -18-
<PAGE>
balance  sheet.  However, we may not be able to do so. If we sell large portions
of our inventory at amounts less than their carrying value or if we write down a
significant  part  of  our inventory, our cost of sales, gross profit, operating
income and net income could suffer greatly during the period in which such event
or  events  occur.

WE  FACE  STRONG  COMPETITION

     We  compete  in  both  the acquisition of inventory and sale of merchandise
with  other  wholesalers,  discount and deep-discount stores, single price point
merchandisers,  mass  merchandisers,  food markets, drug chains, club stores and
other  retailers.  Our  industry  competitors  also  include many privately held
companies and individuals. At times, these competitors are also customers of our
Bargain  Wholesale  division.  In  the  future, new companies may also enter the
deep-discount  retail  industry.  Additionally,  we  currently  face  increasing
competition  for  the  purchase of quality close-out and other special-situation
merchandise.  Some  of  our  competitors  have  substantially  greater financial
resources  and  buying  power  than us. Our capability to compete will depend on
many  factors  including  our  ability  to  successfully  purchase  and  resell
merchandise  at  lower prices than our competitors. We cannot assure you that we
will be able to compete successfully against our current and future competitors.

WE ARE VULNERABLE TO UNCERTAIN ECONOMIC FACTORS, CHANGES IN THE MINIMUM WAGE AND
WORKERS'  COMPENSATION

     Our  ability  to  provide  quality  merchandise at our 99 cents price point
could  be hindered by certain economic factors beyond our control, including but
not  limited  to:

-  increases  in  inflation;
-  increases  in  operating  costs;
-  increases  in  employee  health  care  costs;
-  increases  in  workers'  compensation  benefits;
-  increases  in  prevailing  wage  levels;  and
-  decreases  in  consumer  confidence  levels.

     In  January  2001,  California enacted a minimum wage increase of $0.50 per
hour  with  an  additional  $0.50 increase required in January 2002. In 2001 and
2002, annual payroll expenses as a percentage of sales increased less than 1.0%.
Because  we  provide consumers with merchandise at a 99 cents fixed price point,
we  typically  cannot  pass  on  cost  increases  to  our  customers.

WE  FACE  RISKS  ASSOCIATED  WITH  INTERNATIONAL  SALES  AND  PURCHASES

     Although  international  sales  historically have not been important to our
overall  net  sales,  they  have  contributed  to  historical  growth in Bargain
Wholesale's  net  sales.  In  addition,  some  of  the  inventory we purchase is
manufactured  outside  the  United  States. There are many risks associated with
doing business internationally. Our international transactions may be subject to
risks  such  as:

-  political  instability;
-  currency  fluctuations;
-  exchange  rate  controls;
-  changes  in  import  and  export  regulations;  and
-  changes  in  tariff  and  freight  rates.

     The  United  States and other countries have also proposed various forms of
protectionist  trade  legislation.  Any  resulting  changes  in  current  tariff
structures or other trade policies could lead to fewer purchases of our products
and  could  adversely  affect  our  international  operations.

WE  COULD  ENCOUNTER  RISKS  RELATED  TO  TRANSACTIONS  WITH  OUR  AFFILIATES

     We currently lease 12 of our 99 Cents Only Stores and a parking lot for one
of  these  stores  from certain members of the Gold family and their affiliates.
Our  annual rental expense for these facilities totaled approximately $1.9, $1.9
and  $2.2  million  in  each  of  2000,  2001  and 2002. In addition, one of our
directors, Ben Schwartz, is a trustee of a trust that owns a property on which a
single  99 Cents Only Store is located. We believe that our lease terms are just
as  favorable  to  us as they would be for an unrelated party. Under our current
policy,  we enter into real estate transactions with our affiliates only for the
renewal  or  modification of existing leases and on occasions where we determine
that  such  transactions  are  in  our best interests. Moreover, the independent
members  of  our  Board  of  Directors  must unanimously approve all real estate
transactions  between  the  Company and our affiliates. They must also determine
that  such  transactions are equivalent to a negotiated arm's-length transaction
with  a  third party. We cannot guarantee that we will reach agreements with the
Gold  family  on  renewal terms for the properties we currently lease from them.
Also,  even if we agree to such terms, we cannot be certain that our independent
directors  will  approve them. If we fail to renew one of these leases, we could
be  forced to relocate or close the leased store. Any relocations or closures we
experience  will  be  costly  and  could  adversely  affect  our  business.

WE  RELY  HEAVILY  ON  OUR  MANAGEMENT  TEAM

     Our  success  depends  substantially  on  David Gold and Eric Schiffer, our
Chief  Executive  Officer  and  President,  respectively.  We  also  rely on the
continued  service  of  our executive officers and other key management. We have
not entered into employment agreements with any of our executive officers and we
do  not  maintain key person life insurance on them. As we continue to grow, our
success will depend on our ability to identify, attract, hire, train, retain and
motivate  other  highly  skilled  management  personnel.  Competition  for  such
personnel is intense, and we may not be able to successfully attract, assimilate
or  retain  sufficiently  qualified  candidates.


                                      -19-
<PAGE>
OUR  OPERATING  RESULTS  MAY  FLUCTUATE  AND  MAY BE AFFECTED BY SEASONAL BUYING
PATTERNS

     Historically,  our  highest  net  sales  and operating income have occurred
during  the  fourth  quarter, which includes the Christmas and Halloween selling
seasons.  During  2001  and  2002,  we  generated approximately 29.9% and 29.5%,
respectively,  of our net sales and approximately 35.3% and 32.7%, respectively,
of  our  operating  income  during  the  fourth  quarter.  If for any reason the
Company's  net sales were to fall below norms during the fourth quarter it could
have an adverse impact on our profitability and impair our results of operations
for  the entire year. Adverse weather conditions or other disruptions during the
peak  holiday  season  could also affect our net sales and profitability for the
year.

     In  addition  to  seasonality,  many other factors may cause our results of
operations  to vary significantly from quarter to quarter. Some of these factors
are  beyond  our  control.  These  factors  include:

-    the  number  of  new  stores  and  timing  of  new  store  openings;
-    the  level  of  advertising  and  pre-opening  expenses associated with new
     stores;
-    the  integration  of  new  stores  into  our  operations;
-    general  economic  health  of  the  deep-discount  retail  industry;
-    changes  in  the  mix  of  products  sold;
-    unexpected  increases  in  shipping  costs;
-    ability  to  successfully  manage  our  inventory  levels;
-    changes  in  our  personnel;
-    fluctuations  in  the  amount  of  consumer  spending;
-    the  amount and timing of operating costs and capital expenditures relating
     to  the  growth  of  our  business.

WE  ARE  SUBJECT  TO  ENVIRONMENTAL  REGULATIONS

     Under  various federal, state and local environmental laws and regulations,
current  or  previous  owners or occupants of property may become liable for the
costs of removing any hazardous substances found on the property. These laws and
regulations  often  impose liability without regard to fault. As of December 31,
2002,  we  leased  all  but  23  of  our  stores.  We own our main warehouse and
distribution facility (where our executive offices are located). However, in the
future  we may be required to incur substantial costs for preventive or remedial
measures  associated  with  the presence of hazardous materials. In addition, we
operate one underground diesel storage tank and one above-ground propane storage
tank  at our warehouse. Although we have not been notified of, and are not aware
of, any current environmental liability, claim or non-compliance, we could incur
costs  in  the future related to our leased properties and our storage tanks. In
the  ordinary  course  of  our  business,  we  sometimes  handle  or  dispose of
commonplace  household products that are classified as hazardous materials under
various  environmental  laws and regulations. We have adopted policies regarding
the  handling  and disposal of these products, and we train our employees on how
to  handle  and  dispose  of  them.  We  cannot assure you that our policies and
training  will  successfully  help  us  avoid  potential  violations  of  these
environmental  laws  and  regulations  in  the  future.

ANTI-TAKEOVER  EFFECT;  CONCENTRATION  OF OWNERSHIP BY OUR EXISTING OFFICERS AND
PRINCIPAL  STOCKHOLDERS

     In  addition  to some governing provisions in our Articles of Incorporation
and Bylaws, we are also subject to certain California laws and regulations which
could  delay,  discourage  or prevent others from initiating a potential merger,
takeover  or other change in our control, even if such actions would benefit our
shareholders  and  us.  Moreover  David  Gold,  our Chairman and Chief Executive
Officer,  and  members  of  his immediate family and certain of their affiliates
beneficially  own  as  of  December  31,  2002,  22,736,242  or  31.9% of shares
outstanding.  As  a  result,  they  have  the  ability  to influence all matters
requiring  the vote of our shareholders, including the election of our directors
and  most  of  our  corporate  actions.  They  can also control our policies and
potentially  prevent  a  change  in our control. This could adversely affect the
voting  and  other rights of our other shareholders and could depress the market
price  of  our  common  stock.

OUR  STOCK  PRICE  COULD  FLUCTUATE  WIDELY

     The  market  price  of  our  common stock has risen substantially since our
initial  public  offering  on  May 23, 1996. Trading prices for our common stock
could  fluctuate  significantly  due  to  many  factors,  including:

-    the  depth  of  the  market  for  our  common  stock;
-    changes  in  expectations  of  our  future financial performance, including
     financial  estimates  by  securities  analysts  and  investors;
-    variations  in  our  operating  results;
     conditions  or  trends  in  our industry or in the industries of any of our
     significant  clients;
-    the  conditions  of  the  market  generally;
-    additions  or  departures  of  key  personnel;  and
-    future  sales  of  our  common  stock.

RISKS  COULD  ARISE  DUE  TO  OUR  USE OF ARTHUR ANDERSEN LLP AS OUR INDEPENDENT
AUDITORS

     You may have no effective remedy against Arthur Andersen LLP, which audited
our  financial  statements  included in this report for the years ended December
31,  2000  and  2001,  in connection with a material misstatement or omission in
these  financial  statements, or in connection with any other claim arising from
its  provision  of  auditing  and other services to us. On June 15, 2002, Arthur
Andersen  was convicted of obstructing justice in connection with investigations
of  their  former client Enron Corp. Arthur Andersen ceased practicing befor the
Securities  and  Exchange  Commission  (SEC)  effective  August  31,  2002.  Our
inability  to  include  in  future  registration statements or reports financial
statements  for  one  or  more years audited by Arthur Andersen LLP or to obtain
Arthur  Andersen  LLP's consent to the inclusion of their report on our 2000 and
2001


                                      -20-
<PAGE>
financial  statements  may  impede  our access to the capital markets. Should we
seek  to  access  the  public  capital  markets,  (SEC) rules will require us to
include  or  incorporate  by  reference in any prospectus three years of audited
financial statements. Until our audited financial statements for the fiscal year
ending December 31, 2004 become available, the SEC's current rules would require
us  to present audited financial statements for one or more fiscal years audited
by Arthur Andersen LLP. Prior to that time the SEC may cease accepting financial
statements  audited  by Arthur Andersen LLP, in which case we would be unable to
access the public capital markets unless PricewaterhouseCoopers LLP, our current
independent  accounting firm, or another independent accounting firm, is able to
audit  the  financial  statements  originally audited by Arthur Andersen LLP. In
addition,  as  a  result of the departure of our former engagement team leaders,
Arthur  Andersen  LLP  is no longer in a position to consent to the inclusion or
incorporation  by  reference  in  any  prospectus of their report on our audited
financial  statements  for  the  years  ended December 31, 2000 and December 31,
2001,  and  investors  in  any subsequent offerings for which we use their audit
report  will  not  be  entitled to recovery against them under Section 11 of the
Securities  Act  of  1933  for  any material misstatements or omissions in those
financial  statements.  Consequently, our financing costs may increase or we may
miss  attractive  market opportunities if either our annual financial statements
for  2000  and  2001  audited by Arthur Andersen LLP should cease to satisfy the
SEC's  requirements  or  those statements are used in a prospectus but investors
are  not entitled to recovery against our auditors for material misstatements or
omissions  in  them.

ITEM  7A.     QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES  ABOUT  MARKET  RISK

     The  Company  is  exposed  to  interest  rate  risk  for its investments in
marketable  securities.  At December 31, 2002, the Company had $184.1 million in
marketable  securities  maturing  at  various  dates  through February 2004. The
Company's  investments  are  comprised primarily of investment grade federal and
municipal  bonds  and  commercial paper. The Company generally holds investments
until  maturity,  and  therefore  should not bear any interest risk due to early
disposition.  We  do  not  enter  into  any  derivative or interest rate hedging
transactions.  Any  premium  or  discount  recognized  upon  the  purchase of an
investment  is  amortized over the term of the investment. At December 31, 2002,
the  fair  value  of  investments  approximated  the  carrying  value.


                                      -21-
<PAGE>
ITEM  8.  FINANCIAL  STATEMENTS  AND  SUPPLEMENTARY  DATA

<TABLE>
<CAPTION>
                                 INDEX TO FINANCIAL STATEMENTS

                                      99 CENTS ONLY STORES


<S>                                                                                       <C>
Reports of Independent Public Accountants. . . . . . . . . . . . . . . . . . . . . . . .  23-24
Balance Sheets as of December 31, 2001 and 2002. . . . . . . . . . . . . . . . . . . . .  25-26
Statements of Income for the years ended December 31, 2000, 2001 and 2002. . . . . . . .     27
Statements of Shareholders' Equity  for the years ended December 31, 2000, 2001 and 2002     28
Statements of Cash Flows for the years ended December 31, 2000, 2001 and 2002. . . . . .     29
Notes to Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  30-37
</TABLE>


                                      -22-
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



To Board of Directors and Shareholders of 99 Cents Only Stores:



     In  our  opinion, the financial statements listed in the accompanying index
present  fairly,  in  all  material respects, the financial position of 99 Cents
Only  Stores at December 31, 2002 and the results of its operations and its cash
flows  for  the  year  ended  December  31,  2002  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  audit.  We  conducted  our  audit  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  audit  provides  a
reasonable  basis  for  our  opinion.  The financial statements of 99 Cents Only
Stores  as  of  December  31, 2001 and for the years ended December 31, 2000 and
2001,  were  audited  by  other independent accounts who have ceased operations.
Those  independent  accountants  expressed  an  unqualified  opinion  on  those
financial  statements  in  their  report  dated  February  20,  2002.


PricewaterhouseCoopers  LLP
Los  Angeles,  California
February  3,  2003


                                      -23-
<PAGE>
REPORT OF FORMER INDEPENDENT PUBLIC ACCOUNTANTS

THE  FOLLOWING REPORT IS A COPY OF A REPORT PREVIOUSLY ISSUED BY ARTHUR ANDERSEN
LLP  (ANDERSEN).  THIS REPORT HAS NOT BEEN REISSUED BY ANDERSEN AND ANDERSEN DID
NOT  CONSENT  TO  THE  INCORPORATION BY REFERENCE OF THIS REPORT (AS INCLUDED IN
THIS  FORM  10-K)  INTO  ANY  OF  THE  COMPANY'S  REGISTRATION  STATEMENTS.

TO THE SHAREHOLDERS AND BOARD OF DIRECTORS OF 99 CENTS ONLY STORES:

     We  have audited the accompanying balance sheets of 99 Cents Only Stores (a
California  Corporation)  as  of  December  31,  2000  and  2001 and the related
statements  of income, shareholders' equity and cash flows for each of the three
years  in the period ended December 31, 2001. 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  in accordance with auditing standards generally
accepted  in the United States. 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  management,  as  well  as  evaluating the overall financial
statement  presentation.  We  believe that our audits provide a reasonable basis
for  our  opinion.

     In  our opinion, the financial statements referred to above present fairly,
in  all  material respects, the financial position of 99 Cents Only Stores as of
December 31, 2000 and 2001, and the results of its operations and its cash flows
for  each of the three years in the period ended December 31, 2001 in conformity
with  accounting  principles  generally  accepted  in  the  United  States.

ARTHUR ANDERSEN LLP

Los Angeles, California
February 20,  2002
(Except for the matters discussed
in Note 13, as to which date is
March 9, 2002)


                                      -24-
<PAGE>
<TABLE>
<CAPTION>
                                                   99 CENTS ONLY STORES
                                                      BALANCE SHEETS
                                             AS OF DECEMBER 31, 2001 AND 2002

                                         (AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

                                                          ASSETS


                                                                                                        2001       2002
                                                                                                      ---------  ---------
<S>                                                                                                   <C>        <C>
CURRENT ASSETS:
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $    232   $  7,985
Short-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   147,566    146,857

Accounts receivable, net of allowance for doubtful accounts of $165 and $149 as of December 31, 2001
and 2002, respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     3,523      2,753
Due from shareholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         -      1,232
Income tax receivable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     1,384          -
Inventories. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    66,528     83,176
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     3,886      2,869
                                                                                                      ---------  ---------
  Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   223,119    244,872
PROPERTY AND EQUIPMENT, at cost:
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    20,715     26,779
Building and improvements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    24,007     29,216
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    50,602     70,887
Fixtures and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    28,421     42,018
Transportation equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     2,836      3,045
Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    17,856     14,105
                                                                                                      ---------  ---------
  Total properties, fixtures and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   144,437    186,050
Accumulated depreciation and amortization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   (40,798)   (58,490)
                                                                                                      ---------  ---------
  Total net properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   103,639    127,560

OTHER ASSETS:
Deferred income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    15,688     19,078
Long term investments in marketable securities . . . . . . . . . . . . . . . . . . . . . . . . . . .       533     37,223
Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       296        446
Long term investments in partnerships. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     4,702      4,565
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     4,181      6,166
                                                                                                      ---------  ---------
  Total other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    25,400     67,478
                                                                                                      ---------  ---------
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $352,158   $439,910
                                                                                                      =========  =========
</TABLE>

   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.


                                      -25-
<PAGE>
<TABLE>
<CAPTION>
                              9 CENTS ONLY STORES
                                 BALANCE SHEETS
                        AS OF DECEMBER 31, 2001 AND 2002

                    (AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

                      LIABILITIES AND SHAREHOLDERS' EQUITY


                                                                2001      2002
                                                              --------  --------
<S>                                                           <C>       <C>
CURRENT LIABILITIES:
Current portion of capital lease obligation. . . . . . . . .  $     40  $     40
Accounts payable . . . . . . . . . . . . . . . . . . . . . .    15,244    16,946
Accrued expenses:
   Payroll and payroll-related . . . . . . . . . . . . . . .     2,771     3,652
   Sales tax . . . . . . . . . . . . . . . . . . . . . . . .     3,011     4,329
   Other . . . . . . . . . . . . . . . . . . . . . . . . . .       562     2,176
   Due to shareholder. . . . . . . . . . . . . . . . . . . .     1,655         -
   Worker's compensation . . . . . . . . . . . . . . . . . .     5,534     7,725
   Income taxes payable. . . . . . . . . . . . . . . . . . .         -     3,518
                                                              --------  --------
       Total current liabilities . . . . . . . . . . . . . .    28,817    38,386
LONG-TERM LIABILITIES:
Deferred rent. . . . . . . . . . . . . . . . . . . . . . . .     2,061     2,210
Deferred compensation liability. . . . . . . . . . . . . . .         -     1,102
Capital lease obligation, net of current portion . . . . . .     1,637     1,597
                                                              --------  --------
       Total non-current liabilities . . . . . . . . . . . .     3,698     4,909


COMMITMENTS AND CONTINGENCIES: (Note 8). . . . . . . . . . .         -         -

SHAREHOLDERS' EQUITY:
Preferred stock, no par value
     Authorized-1,000,000 shares
     Issued and outstanding-none . . . . . . . . . . . . . .         -         -
Common stock, no par value
     Authorized-100,000,000 shares
     Issued and outstanding 69,506,103 at December 31, 2001
      and 70,369,178 at December 31, 2002. . . . . . . . . .   156,154   174,152
     Retained earnings . . . . . . . . . . . . . . . . . . .   163,489   222,463
                                                              --------  --------
     Total shareholders' equity. . . . . . . . . . . . . . .   319,643   396,615
                                                              --------  --------
     Total liabilities and shareholders' equity. . . . . . .  $352,158  $439,910
                                                              ========  ========
</TABLE>

   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.


                                      -26-
<PAGE>
<TABLE>
<CAPTION>
                                          99 CENTS ONLY STORES
                                          STATEMENTS OF INCOME
                              YEARS ENDED DECEMBER 31, 2000, 2001 AND 2002

                              (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)


                                                                           2000       2001       2002
                                                                         ---------  ---------  ---------
<S>                                                                      <C>        <C>        <C>
NET SALES:
   99 Cents Only Stores. . . . . . . . . . . . . . . . . . . . . . . .   $402,071   $522,019   $663,983
   Bargain Wholesale . . . . . . . . . . . . . . . . . . . . . . . . .     49,876     56,250     49,959
                                                                         ---------  ---------  ---------
     Total sales . . . . . . . . . . . . . . . . . . . . . . . . . . .    451,947    578,269    713,942
COST OF SALES. . . . . . . . . . . . . . . . . . . . . . . . . . . . .    275,395    350,421    427,356
                                                                         ---------  ---------  ---------
   Gross profit. . . . . . . . . . . . . . . . . . . . . . . . . . . .    176,552    227,848    286,586
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES:
   Operating expenses. . . . . . . . . . . . . . . . . . . . . . . . .    107,981    141,544    178,374
   Depreciation and amortization . . . . . . . . . . . . . . . . . . .      8,666     12,354     17,711
                                                                         ---------  ---------  ---------
     Total SG&A. . . . . . . . . . . . . . . . . . . . . . . . . . . .    116,647    153,898    196,085
   Operating income. . . . . . . . . . . . . . . . . . . . . . . . . .     59,905     73,950     90,501
OTHER (INCOME) EXPENSE:
   Interest income . . . . . . . . . . . . . . . . . . . . . . . . . .     (3,969)    (4,583)    (3,535)
   Interest expense. . . . . . . . . . . . . . . . . . . . . . . . . .        712         92        128
   Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       (360)    (1,440)    (1,440)
                                                                         ---------  ---------  ---------
     Total other (income). . . . . . . . . . . . . . . . . . . . . . .     (3,617)    (5,931)    (4,847)
                                                                         ---------  ---------  ---------
   Income from continuing operations before income taxes . . . . . . .     63,522     79,881     95,348
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . .     24,664     31,438     36,374
                                                                         ---------  ---------  ---------
   Income from continuing operations . . . . . . . . . . . . . . . . .     38,858     48,443     58,974
   Loss from discontinued operations net of income tax benefit of $700     (1,050)         -          -
NET INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   $ 37,808   $ 48,443   $ 58,974
                                                                         =========  =========  =========

EARNINGS PER COMMON SHARE FROM CONTINUING
OPERATIONS:
   Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   $   0.58   $   0.70   $   0.84
   Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   $   0.56   $   0.69   $   0.83
LOSS PER COMMON SHARE FROM DISCONTINUED OPERATIONS:
   Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     ($0.02)         -          -
   Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     ($0.01)         -          -
NET EARNINGS PER COMMON SHARE:
   Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   $   0.56   $   0.70   $   0.84
   Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   $   0.55   $   0.69   $   0.83
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING:
   Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     67,650     68,815     69,938
   Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     68,945     70,009     71,181
</TABLE>

   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.


                                      -27-
<PAGE>
<TABLE>
<CAPTION>
                                   99 CENTS ONLY STORES
                             STATEMENTS OF SHAREHOLDERS' EQUITY
                        YEARS ENDED DECEMBER 31, 2000, 2001 AND 2002

                                   (AMOUNTS IN THOUSANDS)


                                                                 COMMON STOCK      RETAINED
                                                               SHARES    AMOUNT    EARNINGS
                                                               -------  --------  ----------
<S>                                                            <C>      <C>       <C>
BALANCE, December 31, 1999. . . . . . . . . . . . . . . . . .  66,834   $116,775  $  78,765
   Net income . . . . . . . . . . . . . . . . . . . . . . . .       -          -     37,808
   Tax benefit from exercise of stock options . . . . . . . .       -      8,223          -
   Proceeds from exercise of stock options. . . . . . . . . .   1,684     12,961          -
   Compensation expense in connection with cash-less exercise      19        528          -
   Shares repurchased under stock buyback program . . . . . .    (129)         -     (1,527)
                                                               -------  --------  ----------
BALANCE, December 31, 2000. . . . . . . . . . . . . . . . . .  68,408   $138,487  $ 115,046
   Net income . . . . . . . . . . . . . . . . . . . . . . . .       -          -     48,443
   Tax benefit from exercise of stock options . . . . . . . .       -      6,205          -
   Proceeds from exercise of stock options. . . . . . . . . .   1,098     11,462          -
                                                               -------  --------  ----------
BALANCE, December 31, 2001. . . . . . . . . . . . . . . . . .  69,506   $156,154  $ 163,489
   Net income . . . . . . . . . . . . . . . . . . . . . . . .       -          -     58,974
   Tax benefit from exercise of stock options . . . . . . . .       -      5,053          -
   Proceeds from exercise of stock options. . . . . . . . . .     863     12,945          -
                                                               -------  --------  ----------
BALANCE, December 31, 2002. . . . . . . . . . . . . . . . . .  70,369   $174,152  $ 222,463
                                                               =======  ========  ==========
</TABLE>

   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.


                                      -28-
<PAGE>
<TABLE>
<CAPTION>
                                               99 CENTS ONLY STORES
                                             STATEMENTS OF CASH FLOWS
                                   YEARS ENDED DECEMBER 31, 2000, 2001 AND 2002

                                              (AMOUNTS IN THOUSANDS)


                                                                                     2000       2001       2002
                                                                                   ---------  ---------  ---------
<S>                                                                                <C>        <C>        <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 37,808     48,443     58,974
Adjustments to reconcile net income to net cash provided by operating activities:.
   Loss from discontinued operations . . . . . . . . . . . . . . . . . . . . . . .    1,050          -          -
   Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . .    8,666     12,354     17,711
   Compensation expense for cash-less exercise of stock options. . . . . . . . . .      528          -          -
   Tax benefit from exercise of non qualified employee stock options . . . . . . .    8,223      6,205      5,053
   Benefit from deferred income taxes. . . . . . . . . . . . . . . . . . . . . . .   (1,523)    (2,847)    (3,390)
Changes in asset and liabilities associated with operating activities:
   Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     (213)        46        770
   Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   (9,761)    (2,835)   (16,648)
   Other assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   (1,525)        74        134
   Deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      (94)        12       (150)
   Due to shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        -      1,655     (2,887)
   Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    3,612      2,622      3,538
   Accrued expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      855        672      1,977
   Accrued workers' compensation . . . . . . . . . . . . . . . . . . . . . . . . .      669      2,770      2,191
   Income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    5,226     (1,936)     4,901
   Deferred rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      190        (81)       149
   Accrued interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   (3,350)         -          -
                                                                                   ---------  ---------  ---------
     Net cash provided by operating activities . . . . . . . . . . . . . . . . . .   50,361     67,154     72,323
CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchases of property and equipment . . . . . . . . . . . . . . . . . . . . . .  (26,646)   (46,888)   (41,631)
   Purchases of short-term investments . . . . . . . . . . . . . . . . . . . . . .  (52,726)   (35,802)   (35,981)
   Investments in partnerships . . . . . . . . . . . . . . . . . . . . . . . . . .        -     (4,702)       137
   Repurchase of company stock . . . . . . . . . . . . . . . . . . . . . . . . . .   (1,527)         -          -
   Net sales of discontinued operations. . . . . . . . . . . . . . . . . . . . . .   (8,031)         -          -
   Proceeds from sale of Universal International, Inc. . . . . . . . . . . . . . .   33,909          -          -
                                                                                   ---------  ---------  ---------
     Net cash used in investing activities . . . . . . . . . . . . . . . . . . . .  (55,021)   (87,392)   (77,475)
CASH FLOWS FROM FINANCING ACTIVITIES:
   Payments of capital lease obligation. . . . . . . . . . . . . . . . . . . . . .   (7,251)       (26)       (40)
   Proceeds from exercise of stock options . . . . . . . . . . . . . . . . . . . .    12,961     11,462     12,945
                                                                                   ---------  ---------  ---------
     Net cash provided by financing activities . . . . . . . . . . . . . . . . . .    5,710     11,436     12,905
NET INCREASE (DECREASE) IN CASH. . . . . . . . . . . . . . . . . . . . . . . . . .    1,050     (8,802)     7,753
CASH, beginning of year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    7,984      9,034        232
                                                                                   ---------  ---------  ---------
CASH, end of year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $  9,034   $    232   $  7,985
                                                                                   =========  =========  =========

NON CASH INVESTING AND FINANCING ACTIVITIES
   Asset acquired under capital lease. . . . . . . . . . . . . . . . . . . . . . . $      -   $  1,703   $      -
                                                                                   =========  =========  =========
</TABLE>

   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.


                                      -29-
<PAGE>
                              99 CENTS ONLY STORES
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2002


1.   LINE OF BUSINESS

     99  Cents  Only  Stores  (the  Company)  is  incorporated  in  the State of
California.  The Company retails various consumable products through its 123 and
151  stores  at  December 31, 2001 and 2002, respectively. The Company is also a
wholesale  distributor  of  various  consumable  products.

2.   CONCENTRATION OF OPERATIONS IN CALIFORNIA

     All  but  20  of  our  99  Cents Only Stores are located in California. The
Company  operates nine stores in Las Vegas, Nevada and 11 stores in Arizona. The
Company expects that it will continue to open additional stores in California as
well as in Nevada and Arizona. The Company also expects that it will open stores
in  Texas  in  2003.

3.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CASH  AND  CASH  EQUIVALENTS

     The  Statements of Cash Flows classify changes in cash and cash equivalents
(short  term,  highly  liquid  investments readily convertible into cash with an
original  maturity  at  date  of  purchase of three months or less) according to
operating,  investing  or  financing activities. At times, cash balances held at
financial  institutions  are  in excess of federally insured limits. The Company
places  its  temporary  cash  investments  with  high  credit, quality financial
institutions  and  limits  the  amount  of  credit exposure to any one financial
institution.  The  Company  believes no significant concentration of credit risk
exists  with  respect  to  these  cash  statements.

USE  OF  ESTIMATES

     The  preparation  of the financial statements in conformity with accounting
principles  generally  accepted  in  the  United  States  of  America  requires
management to make estimates and assumptions that affect the reported amounts of
assets  and  liabilities  and 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 those
estimates.  Significant  estimates  include  self-insured  workers' compensation
reserves.

INVENTORIES

     Inventories  are  priced  at  the  lower  of  cost (first in, first out) or
market.  Valuation  allowances  are  recorded to properly state inventory at the
lower  of  cost  or  market.

DEPRECIATION  AND  AMORTIZATION

      Property  and  equipment  are amortized and depreciated on a straight-line
basis  over  the  following  useful  lives  of  the  assets:

     Building and improvements . . 27.5 - 30 years
     Leasehold improvements. . . . Lesser of 5 years or remaining lease term
     Fixtures and equipment. . . . 5 years
     Transportation equipment. . . 3 years

     The Company follows the policy of capitalizing expenditures that materially
increase asset lives and charging ordinary repairs and maintenance to operations
as  incurred.

IMPAIRMENT  OF  LONG-LIVED  ASSETS

     The Company reviews its long-lived assets for impairment whenever events or
changes indicate that the carrying amount of an asset or group of assets may not
be  recoverable.  In  evaluating whether an asset has been impaired, the Company
compares  the  anticipated undiscounted future cash flows to be generated by the
asset  to the asset's carrying value. If the sum of the undiscounted future cash
flows  is  less  than  the  carrying  amount of the asset, an impairment loss is
recognized.  No  impairment  losses  were  recorded during the three years ended
December  31,  2002.


                                      -30-
<PAGE>
LEASE ACQUISITION COSTS

     The  Company follows the policy of capitalizing expenditures that relate to
the  acquisition  and  signing  of  its  retail  store  leases.  These costs are
amortized  on  a  straight  line  basis  over the initial term of the lease.

EARNINGS PER SHARE

     "Basic"  earnings  per  share  is  computed  by  dividing net income by the
weighted  average  number of shares outstanding for the year. "Diluted" earnings
per  share  is  computed  by  dividing  net  income by the total of the weighted
average  number  of  shares  outstanding plus the dilutive effect of outstanding
stock  options  (applying  the  treasury  stock  method).

A  reconciliation of the basic weighted average number of shares outstanding and
the  diluted weighted average number of shares outstanding for each of the three
years  in  the  period  ended  December  31,  2002  follows:

<TABLE>
<CAPTION>
                                                              YEARS ENDED DECEMBER 31,
                                                              ------------------------
                                                               (Amounts in thousands)
                                                               2000    2001    2002
                                                              -------  -------  ------
<S>                                                           <C>     <C>     <C>
Weighted average number of common shares
  Outstanding-Basic                                            67,650   68,815  69,938
Dilutive effect of outstanding stock options                    1,295    1,194   1,243
Weighted average number of common shares outstanding-Diluted   68,945   70,009  71,181
</TABLE>

     The  Company  has  elected  to  continue  to  measure  compensation  costs
associated with its stock option plan under APB 25, "Accounting for Stock Issued
to  Employees"  and accordingly, under SFAS No. 123, had the Company applied the
fair  value  based method of accounting, which is not required, to all grants of
stock  options,  under  SFAS No. 123, the Company would have recorded additional
compensation  expense and pro forma net income and earnings per share amounts as
follows  for  the  years  ended  December  31,  2000,  2001 and 2002 (amounts in
thousands,  except  for  per  share  data):


                                             DECEMBER 31,
                                      -------------------------
                          (Amounts in thousands, except for per share data)


                                       2000     2001     2002
                                      -------  -------  -------
     Net income, as reported. . . . . $37,808  $48,443  $58,974
     Additional compensation expense.  11,888    9,818      177
                                      -------  -------  -------
     Pro forma net income . . . . . . $25,920  $38,625  $58,797
                                      =======  =======  =======
     Earnings per share:
     Basic-as reported. . . . . . . . $  0.56  $  0.70  $  0.84
     Basic-pro forma. . . . . . . . . $  0.38  $  0.56  $  0.84
     Diluted-as reported. . . . . . . $  0.55  $  0.69  $  0.83
     Diluted-pro forma. . . . . . . . $  0.38  $  0.55  $  0.83


These  pro  forma  amounts  were determined by estimating the fair value of each
option  on  its grant date using the Black-Scholes option-pricing model with the
following  assumptions:

                                                 DECEMBER 31,
                                      -------------------------------
                                        2000       2001       2002
                                      ---------  ---------  ---------
     Risk free interest rate. . . . .     5.70%      5.44%      1.90%
     Expected life. . . . . . . . . .  10 years   10 Years   10 Years
     Expected stock price volatility.       54%        49%        51%
     Expected dividend yield. . . . .      None       None       None

DEFERRED RENT

     Certain  of the Company's operating leases for its retail locations include
scheduled  increasing  monthly  payments.  In accordance with generally accepted
accounting  principles,  the  Company  has  accounted  for the leases to provide
straight-line  charges  to  operations  over  the  lives  of  the  leases.

REVENUE RECOGNITION

     Revenue is recognized at the point of sale for retail sales and at the time
of  shipment  for  wholesale  sales.


                                      -31-
<PAGE>
PRE-OPENING COSTS

     The  Company  expenses,  as  incurred, all pre-opening costs related to the
opening  of  new  retail  stores.

ADVERTISING

     The  Company  expenses  advertising costs as incurred. Advertising expenses
were  $2.7  million,  $3.4  million  and  $3.1  million for 2000, 2001 and 2002,
respectively.

STATEMENTS OF CASH FLOWS

     Cash  payments  for  income  taxes  were  $12,474,000,  $25,260,000  and
$29,852,000  in  2000,  2001  and  2002, respectively. Interest payments totaled
approximately  $31,000,  $92,000  and  $128,000 for the years December 31, 2000,
2001  and  2002,  respectively.

FAIR VALUE OF FINANCIAL INSTRUMENTS

     The  Company's  financial  instruments  consist  of  cash,  short-term  and
long-term  investments,  short-term trade receivables and payables. The carrying
value  for  all such instruments approximate fair value at December 31, 2001 and
2002.

NEW AUTHORITATIVE PRONOUNCEMENTS

     In  June  2001, the Financial Accounting Standards Board approved two final
statements:  SFAS  No.  141, "Business Combinations," which provides guidance on
the accounting for business combinations and was effective July 1, 2001 and SFAS
No.  142,  "Goodwill  and  Other  Intangible Assets," which defines when and how
goodwill  and  other  intangible  assets  are  amortized and was effective as of
January  1,  2002.  These  statements  did  not  have an impact on the Company's
financial  position  or  results  of  operations.

     In  June  2001,  the  FASB  issued  SFAS  No.  143,  "Accounting  for Asset
Retirement  Obligations"  (SFAS  143).  This  statement  addresses  financial
accounting  and  reporting  for  obligations  associated  with the retirement of
tangible long-lived assets and the associated asset retirement cost. SFAS 143 is
effective  for financial statements issued for fiscal years beginning after June
15,  2002.  The  adoption  of  SFAS  143 did not have an impact on the Company's
financial  position  or  results  of  operations.

     In  August  2001,  the  FASB  issued  SFAS  No.  144,  "Accounting  for the
Impairment  or  Disposal  of  Long-Lived  Assets"  (SFAS  144).  This  statement
addresses  financial  accounting and reporting for long-lived assets and retains
requirements  to  recognize  an  impairment  loss  if  the carrying value is not
recoverable  from  its undiscounted cash flows and to measure an impairment loss
as  the  difference  between the carrying value and the fair value of the asset.
SFAS  144  was  effective  for  the financial statements issued for fiscal years
beginning after December 15, 2001 and interim periods within those fiscal years.
The  adoption  of  SFAS  144  did  not have an impact on the Company's financial
position  or  results  of  operations.

     In  June  2002,  the  FASB  issued  SFAS  No.  146,  "Accounting  for Costs
Associated  with  Exit  or  Disposal  Activities"  (SFAS  146).  This  statement
requires  the  recognition  of costs associated with exit or disposal activities
when  they  are  incurred  rather than at the date of a commitment to an exit or
disposal  plan.  This  statement  is  effective  for exit or disposal activities
initiated  after  December 31, 2002 and is not expected to materially impact the
Company.

     In  November 2002, the FASB issued FASB Interpretation No. 45, "Guarantor's
Accounting  and  Disclosure  Requirements  for  Guarantees,  Including  Indirect
Guarantees  of  Indebtedness of Others" ("FIN 45").  FIN 45 requires a guarantor
to recognize a liability at the inception of a guarantee equal to the fair value
of the obligation undertaken and elaborates on the disclosures to be made by the
guarantor.  The  disclosure  requirements  of FIN 45 are required for the fiscal
year ended December 31, 2002.  The recognition and measurement provisions of FIN
45  are  effective, on a prospective basis, for guarantees issued by the Company
beginning  in  fiscal  2003.  The  adoption  of FIN 45 is not expected to have a
material  impact  on  the Company's financial position or results of operations.

     In  December,  2002,  the  FASB  issued  SFAS  No.  148,  "Accounting  for
Stock-Based Compensation -- Transition and Disclosure" (SFAS 148) - an amendment
of  SFAS  123  "Accounting  for  Stock  -Based  Compensation".  The  standard is
intended to encourage the adoption of the accounting provisions of SFAS 123.  It
is  also  intended  to address constituent concerns about the so-called "ramp-up
effect"  on  net  income  that  resulted  from the application of the transition
guidance  originally  required by SFAS 123. The transition and annual disclosure
provisions  of SFAS 148 are effective for fiscal years ending after December 15,
2002.  Under  the  provisions  of  SFAS  148, companies that choose to adopt the
accounting  provisions  of  SFAS  123  will  be  permitted  to select from three
transition  methods.  The  Company  continues  to recognize stock based employee
compensation  under  APB  Opinion  No.  25.

4.   INVESTMENTS

     Investments  in debt and equity securities are recorded as required by SFAS
No.  115,  "Accounting for Certain Investments in Debt and Equity Securities" as
trading  securities.  The  Company's  investments  are  comprised  primarily  of
investment  grade  federal  and  municipal  bonds  and  commercial  paper. As of
December  31,  2001  and  2002,  the  fair value of investments approximated the
carrying  values  and  were  invested  as  follows:


                                      -32-
<PAGE>
<TABLE>
<CAPTION>
                                          YEARS ENDED DECEMBER 31,
                                          ------------------------
                                           (Amounts in thousands)

                                MATURITY                         MATURITY
                                WITHIN 1   1 YEAR OR             WITHIN 1   1 YEAR OR
                        2001      YEAR        MORE       2002      YEAR        MORE
                      --------  ---------  ----------  --------  ---------  ----------
<S>                   <C>       <C>        <C>         <C>       <C>        <C>
Municipal bonds. . . . $113,075  $ 112,542  $      533  $119,798  $  99,180  $   20,618
Corporate securities .     981        981           -    40,373     40,373           -
Commercial paper . . .  34,043     34,043           -    23,909      7,304      16,605
                      --------  ---------  ----------  --------  ---------  ----------
                      $148,099  $ 147,566  $      533  $184,080  $ 146,857  $   37,223
                      ========  =========  ==========  ========  =========  ==========
</TABLE>

5.   PURCHASE OF FACILITIES

     In  December  2000,  the  Company exercised its option to purchase its main
warehouse,  distribution  and  corporate  office facility (approximately 880,000
square  feet)  for  $10.5  million.  Included  in  property  and  equipment  is
approximately  $13.7  million  of  land  and  building, at cost, related to this
property.  On  February  4, 2003 the Company announced the purchase of a 741,000
square  foot  distribution  center  in  Houston,  to  service  its planned store
expansion in Texas in 2003 and beyond. The facility was acquired for $23 million
in  cash  and  contains  built  in  refrigerated  and  frozen  storage  space.

6.   INCOME TAX PROVISION

     The  provisions  for  income taxes from continuing operations for the three
years  ended  December  31,  2002  are  as  follows:

                             YEARS ENDED DECEMBER 31,
                          ----------------------------
                             (Amounts in thousands)

                            2000      2001      2002
                          --------  --------  --------
Current:
    Federal. . . . . . .  $20,917   $29,340   $32,237
    State. . . . . . . .    5,270     7,558     7,527
                           26,187    36,898    39,764
Deferred . . . . . . . .   (1,523)   (5,460)   (3,390)
Provision for income tax  $24,664   $31,438   $36,374

     Differences between the provisions for income taxes and income taxes at the
statutory  federal  income  tax rate for the three years ended December 31, 2002
are  as  follows:

<TABLE>
<CAPTION>
                                                                  YEAR ENDED DECEMBER 31,
                                               ----------------------------------------------------------
                                                                  (Amounts in thousands)
                                                     2000                 2001                2002
                                               ------------------  ------------------  ------------------
                                                AMOUNT   PERCENT    AMOUNT   PERCENT    AMOUNT   PERCENT
                                               --------  --------  --------  --------  --------  --------
<S>                                            <C>       <C>       <C>       <C>       <C>       <C>
Income tax at statutory federal rate           $22,232      35.0%  $27,959      35.0%  $33,372      35.0%
State income taxes, net of federal income tax
effect                                           3,386       5.3     4,258       5.3     5,206       5.5
Effect of permanent differences                   (291)     (0.5)     (404)     (0.5)     (631)     (0.7)
Other, including valuation allowance                 -         -         -         -    (1,200)     (1.2)
Welfare to work, LARZ and other job credits       (663)     (1.0)     (375)     (0.4)     (373)     (0.4)
                                               --------  --------  --------  --------  --------  --------
                                               $24,664      38.8%  $31,438      39.4%  $36,374      38.2%
</TABLE>

     A  detail  of the Company's deferred tax assets as of December 31, 2001 and
2002  is  as  follows:

<TABLE>
<CAPTION>
                                  YEAR ENDED DECEMBER 31,
                                  -----------------------
                                  (Amounts in thousands)
                                      2001      2002
                                  ----------  ----------
<S>                               <C>         <C>
Inventory                         $     494   $     617
Uniform inventory capitalization      1,771       3,042
Depreciation                          6,141       6,633
Liability for claims                    112         121
Workers' compensation                 2,231       3,353
Deferred rent                           831         959


                                      -33-
<PAGE>
State taxes                           2,575       2,688
Other, net                           (2,109)     (2,190)
Net operating loss carryforwards      8,182       7,755
                                    $20,228     $22,978
Valuation allowance                  (4,540)     (3,900)
                                    $15,688     $19,078
</TABLE>

     In  connection  with  the  acquisition and subsequent sale of Universal and
Odd's-N-End's,  the  Company  has  remaining  federal  net  operating  loss
carryforwards  of  approximately $22.2 million which it can use to offset future
taxable income. Future use of these loss carryforwards may be limited and expire
at  various dates through 2017. Due to the uncertainty of the future use of such
loss  carryforwards, the Company has recorded a valuation allowance equal to the
tax  effect  of  the  loss  carryforward  that  may  not  be  realizable.

7.   RELATED-PARTY  TRANSACTIONS

     The  Company  leases  certain  retail  facilities  from  its  principal
shareholders.  Rental  expense  for  these  facilities  was  approximately  $1.9
million,  $1.9 million and $2.2 million in 2000, 2001 and 2002, respectively. In
addition,  one  of  the  Company's outside director is a trustee of a trust that
owns  a  property  on  which  a  single  99  Cents  Only  Stores  is  located.

     Effective  September 30, 2000, the Company sold its discontinued operation,
Universal  International,  Inc. to a Company owned 100% by Dave and Sherry Gold,
both significant shareholders of 99 Cents Only Stores (see note 12). Mr. Gold is
also  an  executive officer and director. In connection with this sale a service
agreement was signed between Universal and the Company. During fiscal year 2000,
the Company recorded an additional net loss from discontinued operations of $1.1
million,  net  of  a  tax benefit of $0.7 million, for operating losses incurred
through  the date of sale, in excess of the amounts originally provided in 1999.
In  the  fourth quarter of 2000, the Company received $1.3 million in management
fees  under the service agreement with Universal. The Company also received $0.4
million  in  lease  payments for rental of a distribution facility to Universal.
During  2001,  the  Company  received  $3.7  million  in  fees under the service
agreement,  $1.4  million in lease payments and sold $4.7 million in merchandise
to  Universal  at  a  10%  mark-up. In 2002 the Company received $1.5 million in
management  fees under the service agreement and $1.4 million in lease payments.
It  also purchased $0.4 million of closeout inventory from Universal. Resolution
of  Universal  post  closing  business  issues has required the extension of the
service  agreement  and  lease  arrangement  with 99 Cents Only Stores to a date
ending  some  time  in  2003.

8.   COMMITMENTS  AND  CONTINGENCIES

CREDIT  FACILITY

     The  Company  does  not  maintain  any  credit  facilities  with  any bank.

LEASE  COMMITMENTS

     The  Company  leases  various  facilities under operating leases except for
two,  which were classified as capital leases, expiring at various dates through
2017.  Some  of  the lease agreements contain renewal options and/or provide for
scheduled  increases  or  increases  based  on  the  Consumer Price Index. Total
minimum lease payments under each of these lease agreements, including scheduled
increases,  are  charged to operations on a straight-line basis over the life of
each  respective  lease.  Certain  leases require the payment of property taxes,
maintenance  and  insurance.  Rental expense charged to operations in 2000, 2001
and  2002  was  approximately  $15.6  million,  $19.4 million and $24.9 million,
respectively.

     As  of  December  31,  2002,  the  minimum annual rentals payable under all
non-cancelable  operating  leases  were  as  follows:  (Amounts  in  thousands):

     YEAR ENDING DECEMBER 31:                OPERATING LEASES    CAPITAL LEASES
     --------------------------------------  -----------------  ----------------
     2003                                    $          21,829  $           169
     2004                                               20,714              169
     2005                                               18,207              169
     2006                                               15,432              169
     2007                                               11,650              169
     Thereafter                                         38,611            1,525
     Future minimum lease payments           $         126,443  $         2,370
     Less amount representing interest                                     (733)
     Present value of future lease payments                     $         1,637

WORKERS' COMPENSATION

     Effective  August  11, 1993, the Company became self-insured as to workers'
compensation  claims.  The  Company  provides  for losses of estimated known and
incurred  but  not  reported  insurance  claims.  Known claims are estimated and
accrued  when  reported.  At December 31, 2001 and 2002, the Company had accrued
approximately  $5.5  million  and  $7.7  million,  respectively,  for  estimated
workers'  compensation  claims.  The


                                      -34-
<PAGE>
Company  also  maintains  a  $6.7  million  security  deposit,  in  the  form of
marketable  securities  held  for  the  benefit  of the California Department of
Industrial  Relations  Self  Insurance  Plans.

LEGAL  MATTERS

     The Company is named as a defendant in various legal matters arising in the
normal  course  of business. In management's opinion, none of these matters will
have a material effect on either the Company's financial position or its results
of  operations.

9.   STOCK-BASED COMPENSATION PLANS

     The  Company  has  one  stock option plan (the 1996 Stock Option Plan). The
plan  is  a  fixed  plan,  which  provides for the granting of non-qualified and
incentive  options  to purchase up to 17,000,000 shares of common stock of which
6,199,566  are  available  for  future  option grants. Options may be granted to
officers,  employees,  directors  and  consultants. Grants may be at fair market
value  at  the  date  of  grant  or  at  a  price determined by the compensation
committee  consisting  of  four  outside  members of the board of directors (the
"Committee"). Options vest over a three-year period, one-third one year from the
date  of  grant and one third per year thereafter. Options expire ten years from
the  date  of  grant.  The  Company  accounts  for  its  stock option plan under
Accounting  Principles  Bulletin Opinion No. 25 ("APB 25") "Accounting for Stock
Issued  to  Employees"  under  which no compensation cost has been recognized in
fiscal  2000,  2001  and  2002.  The  following  table  summarizes stock options
available  for  grant:

                                    YEAR ENDED DECEMBER 31,
                                 -------------------------------------
                                    2000         2001         2002
                                 -----------  -----------  -----------
     Beginning balance            4,469,005    3,478,532    2,463,061
     Authorized                           -            -    4,665,633
     Granted                     (1,654,804)  (1,178,491)  (1,030,521)
     Cancelled                      664,331      163,020      101,393
     Available for future grant   3,478,532    2,463,061    6,199,566

     A  summary of the status of the Company's stock option plan at December 31,
2000,  2001 and 2002 and changes during the years then ended is presented in the
table  and  narrative  below:

<TABLE>
<CAPTION>
                                                                   YEAR ENDED DECEMBER 31,
                                          -----------------------------------------------------------------------
                                                    2000                    2001                  2002
                                          ------------------------  ----------------------  ---------------------
                                                       WTD AVG EX                 WTD AVG                WTD AVG
                                            SHARES        PRICE       SHARES     EX PRICE     SHARES    EX PRICE
                                          -----------  -----------  -----------  ---------  ----------  ---------
<S>                                       <C>          <C>          <C>          <C>        <C>         <C>
Outstanding at the beginning of the year   5,970,422   $     10.68   5,277,176   $   13.06  5,194,729   $   15.00
Granted                                    1,654,805         17.00   1,178,491       20.40  1,030,521       29.60
Exercised                                 (1,683,720)         7.94  (1,097,918)      10.89   (863,075)      14.50
Cancelled                                   (664,331)        14.49    (163,020)      18.88   (101,393)      19.87
Outstanding at the end of the year         5,277,176         13.06   5,194,729       15.00  5,260,782       17.86
Exercisable at the end of the year         2,319,656          8.77   2,587,947       11.36  3,046,933       13.44
Weighted average fair value of options
granted                                                $     12.09               $   13.80              $   17.86
</TABLE>

The  following  table  summarized information about stock options outstanding at
December  31,  2002:

<TABLE>
<CAPTION>
                                WEIGHTED      WEIGHTED                WEIGHTED
RANGE OF                        AVERAGE        AVERAGE                 AVERAGE
EXERCISE         OPTIONS       REMAINING      EXERCISE     OPTIONS    EXERCISE
PRICES         OUTSTANDING  CONTRACTUAL LIFE    PRICE    EXERCISABLE    PRICE
-------------  -----------  ----------------  ---------  -----------  ---------
<S>            <C>          <C>               <C>        <C>          <C>
  2.64-$5.50      725,381               4.0   $   4.27      725,381   $   4.27
  5.51-$8.70        1,635               4.6       6.82        1,635       6.82
 8.71-$15.75      581,901               5.3      11.41      570,359      11.38
15.76-$22.50    2,936,713               7.4      18.42    1,749,245      17.92
22.51-$31.00    1,015,152               9.3      29.66          313      24.81
               -----------  ----------------  ---------  -----------  ---------
                5,260,782               7.1   $  17.86    3,046,933   $  13.44
               ===========  ================  =========  ===========  =========
</TABLE>


                                      -35-
<PAGE>
10.  OPERATING SEGMENTS

     The  Company  has  two  business  segments, retail operations and wholesale
distribution.  The  majority  of  the  product  offerings  include  recognized
brand-name  consumable  merchandise,  regularly  available  for reorder. Bargain
Wholesale  sells the same merchandise at prices generally below normal wholesale
levels  to  local,  regional  and  national  distributors  and  exporters.

     The  accounting  policies  of  the segments are the same as those described
above  in  the summary of significant accounting policies. The Company evaluates
segment  performance  based  on  the net sales and gross profit of each segment.
Management  does  not  track  segment  data  or  evaluate segment performance on
additional  financial information. As such, there are no separately identifiable
segment assets or separately identifiable statements of income data (below gross
profit)  to  be  disclosed.

     The  Company  accounts  for  inter-segment  transfers  at  cost through its
inventory  accounts.

     The  Company  had  no  customers  representing  more than 10 percent of net
sales. Substantially all of the Company's net sales were to customers located in
the  United  States.

     Reportable  segment information for the years ended December 31, 2000, 2001
and  2002  follows  (amounts  in  thousands):

                    RETAIL   WHOLESALE    TOTAL
                   --------  ----------  --------
     2000
     -----
     Net sales     $402,071  $   49,876  $451,947
     Gross Margin   166,054      10,498   176,552

     2001
     ----
     Net sales     $522,019  $   56,250  $578,269
     Gross Margin   217,015      10,833   227,848

     2002
     ----
     Net sales     $663,983  $   49,959  $713,942
     Gross Margin   276,560      10,026   286,586


11.  401(K)  PLAN

     In  1998  the  Company  adopted  a  401(k)  Plan  (the Plan). All full-time
employees are eligible to participate in the plan after 3 months of service. The
Company  does  not match employee contributions. The Company may elect to make a
discretionary  contribution  to the Plan. For the years ended December 31, 2000,
2001  and  2002,  no  discretionary  contributions  were  made.

12.     DISCONTINUED  OPERATIONS

     On  March  4,  2000,  the  Board  of  Directors approved the disposition of
Universal  International,  Inc.  and  Odd's-n-End's,  Inc.,  which comprises the
retail  operations  of  Odds-n-Ends,  Inc.  and  Only  Deals,  Inc.

     The  Company engaged an investment-banking firm in May 2000 to evaluate and
identify  potential  buyers  for  the  Universal  business  and expected to sell
Universal  within  the  one-year  time  frame.  The  investment  banking  firm's
marketing  process  focused  upon  selling the business as a going concern. From
June  2000  through  August  2000,  sales  presentations  were delivered to both
strategic  buyers  and  financial  buyers.  This  process  did  not generate the
expected  interest  level  from  potential buyers that had been anticipated. The
highest  offer  for  the  Universal  business  was  significantly  less than the
Company's expectations. As a result of the difficulties encountered in trying to
sell Universal and the necessity to complete the process by December 31, 2000 it
was  decided  by  the  Board  of  Directors  to  be  in  the  Company's  and the
shareholders'  best  interest to sell Universal for the Company's carrying value
as  of  the  close of business on September 30, 2000 to Universal Deals, Inc., a
limited  liability company owned 100% by David and Sherry Gold, both significant
shareholders  of  99  Cents Only Stores. Mr. Gold is also Chairman and CEO of 99
Cents  Only  Stores.  The  sales  price for Universal was the Company's carrying
value  as  of  the  close  of  business  on  September 30, 2000, which was $33.9
million.  The  net  assets  at  September  30,  2000  included  $29.2 million in
inventory,  net  fixed  assets of $7.6 million and $0.6 million of other assets.
These  assets were offset by $3.5 million of accounts payable, accrued and other
liabilities.  In  connection  with  this  transaction  99  Cents  Only Stores is
providing  certain  ongoing  administrative  and  other  services  to  Universal
pursuant  to a Services Agreement. During fiscal year 2000, the Company recorded
an  additional  net  loss from discontinued operations of $1.1 million, net of a
tax  benefit  of $0.7 million, for operating losses incurred through the date of
sale,  in  excess  of  the  amounts  originally  provided in 1999. In the fourth
quarter  of 2000, the Company received $1.3 million in management fees under the
service  agreement  with  Universal.  The  Company also received $0.4 million in
lease  payments for rental of a distribution facility to Universal. During 2001,
the  Company  received  $3.7  million  in fees under the service agreement, $1.4
million in lease payments and sold $4.7 million in merchandise at a 10% mark-up.
In  2002  the Company received $1.5 million in management fees under the service
agreement  from  Universal and $1.4 million in lease payments. It also purchased
$0.4  million of closeout inventory from Universal. Resolution of Universal post
closing  business issues has required the extension of the service agreement and
lease arrangement with 99 Cents Only Stores to a date ending some time in 2003.


                                      -36-
<PAGE>
13.  STOCK  SPLIT

     On  March  9,  2002,  the  Company's  Board  of  Directors  approved  a
four-for-three  stock  split  distributed  on  April  3, 2002 to shareholders of
record  on  March  25,  2002.  Also on February 17, 2001, the Company's Board of
Directors  approved a three-for-two stock split distributed on March 20, 2001 to
shareholders  of  record  on May 14, 2001. All share and per share data has been
restated  to  reflect  these  stock  splits.

ITEM  9.  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING AND
FINANCIAL  DISCLOSURE

     As  of  June 13, 2002, upon the recommendation of the Audit Committee of 99
Cents  Only  Stores  (the  "company"),  the  Board of Directors dismissed Arthur
Andersen LLP ("Andersen") as the Company's independent auditors. Arthur Andersen
had  served  as  the  Company's  independent  auditors  since  1989.

     Andersen's  reports on the consolidated financial statements of the Company
and  its  subsidiaries for the two most recent years ended December 31, 2001 did
not  contain any adverse opinion or disclaimer of opinion, nor were such reports
qualified  or modified as to uncertainty, audit scope or accounting principles.

     During  the  Company's two most recent fiscal years ended December 31, 2001
and  the  subsequent  interim  period  through June 13, 2002, there were: (i) no
disagreements  between  the  Company  and  Andersen on any matters of accounting
principles  or  practices,  financial statement disclosure, or auditing scope or
procedure  which,  if not resolved to Andersen's satisfaction, would have caused
them  to  make reference to the subject matter of the disagreement in connection
with  their  reports on the Company's consolidated financial statements for such
years;  and  (ii)  no  "reportable events" as defined in item 304 (a) (1) (v) of
Regulation  S-K.

     The Company provided Andersen with a copy of the foregoing disclosures, and
Andersen  delivered  a  letter  to  the  SEC,  dated  June 13, 2002, stating its
agreement  with  such  statements.

     On June 13, 2002, the Company engaged PricewaterhouseCoopers LLP ("PwC") as
its  independent  auditors to audit its financial statements for the year ending
December  31,  2002. The decision to engage PwC was recommended by the Company's
Audit  Committee  and  approved  by  its  Board  of  Directors.

     During  the  Company's  two  most  recent years ended December 31, 2001 and
subsequent  interim  period  through  June 13, 2002, the Company did not consult
with PwC with respect to the application of accounting principles to a specified
transaction,  either  completed  or  proposed, or the type of audit opinion that
might  be  rendered  on  the  Company's consolidated financial statements or any
other  matters  or  reportable  events as set forth in Items 304 (a) (2) (i) and
(ii)  of  Regulation  S-K.


                                      -37-
<PAGE>
                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     Information  regarding  Directors  and Executive Officers of the registrant
required  by  Item 401 of Regulation S-K and information regarding Directors and
Executive  Officers  of the registrant required by Item 405 of Regulation S-K is
presented  under the captions "Election of Directors," "Management" and "Section
16(a)  Beneficial  Ownership  Reporting  Compliance"  in  the  definitive  Proxy
Statement  for  the  Company's  2003  Annual  Meeting  of  Shareholders,  and is
incorporated  herein  by  reference.

ITEM 11. EXECUTIVE COMPENSATION

     The  information  required by Item 402 of Regulation S-K is presented under
the  caption  "Executive Compensation" in the definitive Proxy Statement for the
Company's  2003  Annual  Meeting  of Shareholders, and is incorporated herein by
reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The  information  required by Item 403 of Regulation S-K is presented under
the  caption  "Principal Shareholders" in the definitive Proxy Statement for the
Company's  2003  Annual  Meeting  of Shareholders, and is incorporated herein by
reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The  information  required by Item 404 of Regulation S-K is presented under
the  caption  "Certain  Relationships" in the definitive Proxy Statement for the
Company's  2003  Annual  Meeting  of Shareholders, and is incorporated herein by
reference.

ITEM 14. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

     Within  the  90-day period prior to the date of this report, we carried out
an  evaluation  under  the  supervision  and  with  the  participation  of  our
management,  including  our  Chief Executive Officer ("CEO") and Chief Financial
Officer  ("CFO"),  of  the  effectiveness  of  the  design  and operation of our
disclosure  controls  and  procedures  ("Disclosure  Controls") pursuant to Rule
13a-14(c)  and 15d-14(c) of the Securities Exchange Act of 1934. Based upon that
evaluation, our CEO and our CFO concluded that, subject to the limitations noted
below,  our  Disclosure Controls and procedures are effective in timely alerting
them  to  material  information  required  to  be  included  in our periodic SEC
filings.

CHANGES IN INTERNAL CONTROLS AND PROCEDURES

     There have been no significant changes in our internal controls or in other
factors,  which  could  significantly affect internal controls subsequent to the
date  that  the  Company  carried  out  its  evaluation.

LIMITATIONS ON THE EFFECTIVENESS OF CONTROLS

     Our  management,  including  our  CEO  and  CFO,  does  not expect that our
Disclosure  Controls  and  internal controls will prevent all error and fraud. A
control  system,  no  matter  how  well conceived and operated, can provide only
reasonable,  not  absolute,  assurance that the objectives of the control system
can  be  met. Further, the design of a control system must reflect the fact that
there  are resource constraints, and the benefits of controls must be considered
relative  to  their  costs.  Because  of the inherent limitations in all control
systems,  no  evaluation  of  controls  can  provide absolute assurance that all
control  issues  and  instances  of  fraud, if any, within the Company have been
detected.  These  inherent  limitations include the realities that judgements in
decision-making  can  be faulty, and that breakdowns can occur because of simple
error  or  mistake. Additionally, controls can be circumvented by the individual
acts  of  some  persons,  by  collusion  of two or more people, or by management
override  of  the  control.


                                      -38-
<PAGE>
                                     PART IV

ITEM  15.  EXHIBITS,  FINANCIAL  STATEMENT  SCHEDULES  AND  REPORTS  ON FORM 8-K

1.   Financial  Statements.  Reference  is  made  to  the Index to the Financial
     Statements  set  forth  in  item  8  on  page  34  of  this  Form  10-K.

2.   Financial Statement Schedules. All Schedules for which provision is made in
     the  applicable  accounting  regulations  of  the  Securities  and Exchange
     Commission  are  included  herein.

3.   The Exhibits listed on the accompanying Index to Exhibits are filed as part
     of,  or  incorporated  by  reference  into,  this  report

4    Reports  on  Form 8-K. The Company filed two reports on form 8-K during the
     last  quarter  of  2002. One was filed on October 8, 2002 and the second on
     October  23,  2002.


                                      -39-
<PAGE>
SIGNATURES

     Pursuant  to  the  requirements  of  Section  13 or 15(d) of the Securities
Exchange  Act  of  1934,  the Registrant has duly caused this annual report Form
10-K  to  be signed on its behalf by the undersigned, thereunto duly authorized.

                                        99  Cents  Only  Stores

                                        /s/  Eric  Schiffer
                                        -------------------------
                                        By: Eric  Schiffer
                                        President

     Pursuant  to  the  requirements of the Securities Exchange Act of 1934 this
Annual  Report  on  Form  10K  has been signed below by the following persons on
behalf  of  the  Registrant  and  in  the capacities and on the dates indicated.

<TABLE>
<CAPTION>



SIGNATURE                                  TITLE                           DATE
<S>                    <C>                                            <C>
/s/ David Gold
---------------------  Chairman of the Board and Chief Executive      March 28, 2003
David Gold             Officer


/s/ Howard Gold
---------------------  Senior Vice President of Distribution and      March 28, 2003
Howard Gold            Director


/s/ Jeff Gold
---------------------  Senior Vice President of Real Estate and       March 28, 2003
Jeff Gold              Information Systems and Director


/s/ Eric Schiffer
---------------------  President and Director                         March 28, 2003
Eric Schiffer


/s/ Andrew Farina
---------------------  Chief Financial Officer (Principal financial   March 28, 2003
Andrew Farina          officer and principal accounting officer)


/s/ William Christy
---------------------  Director                                       March 28, 2003
William Christy


/s/ Lawrence Glascott
---------------------  Director                                       March 28, 2003
Lawrence Glascott


/s/ Marvin L. Holen
---------------------  Director                                       March 28, 2003
Marvin L. Holen


/s/ Ben Schwartz
---------------------  Director                                       March 28, 2003
Ben Schwartz


/s/ John Shields
---------------------  Director                                       March 28, 2003
John Shields
</TABLE>


                                      -40-
<PAGE>
                                CERTIFICATION OF
                             CHIEF EXECUTIVE OFFICER
                             OF 99 CENTS ONLY STORES


I,   David  Gold,  certify  that:

1.   I  have  reviewed  this annual report on Form 10-K of 99 Cents Only Stores;

2.   Based  on  my  knowledge,  this  annual  report does not contain any untrue
     statement  of a material fact or omit to state a material fact necessary to
     make  the  statements  made, in light of the circumstances under which such
     statements  were made, not misleading with respect to the period covered by
     this  annual  report;

3.   Based  on  my  knowledge,  the  financial  statements,  and other financial
     information  included in this annual report, fairly present in all material
     respects  the  financial condition, results of operations and cash flows of
     the  registrant  as  of,  and  for, the periods presented in this quarterly
     report;

4.   The  registrant's  other  certifying  officers  and  I  are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in  Exchange  Act  Rules 13a-14 and 15d-14) for the registrant and we have:

     a.   Designed  such  disclosure  controls  and  procedures  to  ensure that
          material  information  relating  to  the  registrant,  including  its
          consolidated  subsidiaries, is made known to us by others within those
          entities,  particularly  during the period in which this annual report
          is  being  prepared;

     b.   Evaluated  the  effectiveness  of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this  annual  report  (the  "Evaluation  Date");  and

     c.   Presented  in  this  annual  report  our  conclusions  about  the
          effectiveness  of  the disclosure controls and procedures based on our
          evaluation  as  of  the  Evaluation  Date;

5.   The  registrant's  other certifying officers and I have disclosed, based on
     our  most  recent  evaluation,  to  the registrant's auditors and the audit
     committee  of  registrant's  board  of directors (or persons performing the
     equivalent  functions):

     a.   All  significant  deficiencies  in the design or operation of internal
          controls  which  could  adversely  affect  the registrant's ability to
          record,  process,  summarize  and  report  financial  data  and  have
          identified  for  the  registrant's auditors any material weaknesses in
          internal  controls;  and

     b.   Any  fraud, whether or not material, that involves management or other
          employees  who  have  a  significant role in the registrant's internal
          controls;  and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     annual  report  whether  or  not there were significant changes in internal
     controls  or  in  other  factors  that  could significantly affect internal
     controls  subsequent  to  the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date: March 28, 2003


     By: /s/  David  Gold
         ------------------------
         David  Gold
         Chief Executive Officer


                                      -41-
<PAGE>
                                CERTIFICATION OF

                             CHIEF FINANCIAL OFFICER

                             OF 99 CENTS ONLY STORES


I,  Andrew  Farina,  certify  that:

1.   I  have  reviewed  this annual report on Form 10-K of 99 Cents Only Stores;

2.   Based  on  my  knowledge,  this  annual  report does not contain any untrue
     statement  of a material fact or omit to state a material fact necessary to
     make  the  statements  made, in light of the circumstances under which such
     statements  were made, not misleading with respect to the period covered by
     this  annual  report;

3.   Based  on  my  knowledge,  the  financial  statements,  and other financial
     information  included in this annual report, fairly present in all material
     respects  the  financial condition, results of operations and cash flows of
     the registrant as of, and for, the periods presented in this annual report;

4.   The  registrant's  other  certifying  officers  and  I  are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in  Exchange  Act  Rules 13a-14 and 15d-14) for the registrant and we have:

     a.   Designed  such  disclosure  controls  and  procedures  to  ensure that
          material  information  relating  to  the  registrant,  including  its
          consolidated  subsidiaries, is made known to us by others within those
          entities,  particularly  during the period in which this annual report
          is  being  prepared;

     b.   Evaluated  the  effectiveness  of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this  annual  report  (the  "Evaluation  Date");  and

     c.   Presented  in  this  annual  report  our  conclusions  about  the
          effectiveness  of  the disclosure controls and procedures based on our
          evaluation  as  of  the  Evaluation  Date;

5.   The  registrant's  other certifying officers and I have disclosed, based on
     our  most  recent  evaluation,  to  the registrant's auditors and the audit
     committee  of  registrant's  board  of directors (or persons performing the
     equivalent  functions):

     a.   All  significant  deficiencies  in the design or operation of internal
          controls  which  could  adversely  affect  the registrant's ability to
          record,  process,  summarize  and  report  financial  data  and  have
          identified  for  the  registrant's auditors any material weaknesses in
          internal  controls;  and

     b.   Any  fraud, whether or not material, that involves management or other
          employees  who  have  a  significant role in the registrant's internal
          controls;  and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     annual  report  whether  or  not there were significant changes in internal
     controls  or  in  other  factors  that  could significantly affect internal
     controls  subsequent  to  the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date:  March  28,  2003

     By: /s/  Andrew  Farina
         ------------------------
         Andrew  Farina
         Chief Financial Officer


                                      -42-
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

PART I. FINANCIAL STATEMENT SCHEDULE

To the Board of Directors Of 99 Cents Only Stores:

Our  audit  of the financial statements referred to in our report dated February
3,  2003  appearing  in  the 2002 Annual Report to Shareholders of 99 Cents Only
Stores  also  included  an  audit  of  the  financial  stateme

nt  schedule  listed  in  Item 15(a)(2) of this Form 10-K.  In our opinion, this
financial  statement  schedule  presents  fairly,  in all material respects, the
information  set  forth  therein  when  read  in  conjunction  with  the related
financial  statements.


PricewaterhouseCoopers  LLP
Los  Angeles,  CA
February  3,  2003


                                      -43-
<PAGE>
<TABLE>
<CAPTION>
                                   99 CENTS ONLY STORES
                     SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
            FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2002

                                                     (AMOUNTS IN THOUSANDS)

                                       BEGINNING OF                               END OF
                                           YEAR       ADDITION  REDUCTION  OTHER   YEAR
                                       -------------  --------  ---------  -----  -------
<S>                                    <C>            <C>       <C>        <C>    <C>
For the year ended December 31, 2002
  Allowance for doubtful accounts      $         165         -         16      -  $   149
  Inventory reserve                    $       1,224       298          -      -  $ 1,522
For the year ended December 31, 2001:
  Allowance for doubtful accounts      $         113       177        125      -  $   165
  Inventory reserve                    $       1,279       179        234         $ 1,224
For the year ended December 31, 2000:
  Allowance for doubtful accounts      $         140         -         27      -  $   113
  Inventory reserve                    $       1,503         -        224      -  $ 1,279
</TABLE>


                                      -44-
<PAGE>
                                  EXHIBIT INDEX


EXHIBIT  DESCRIPTION:

3.1   Amended  and  Restated  Articles  of  Incorporation  of  the  Registrant.*

3.2   Amended  and  Restated  Bylaws  of  the  Registrant.(1)

4.1   Specimen  certificate  evidencing  Common  Stock  of  the  Registrant.(1)

10.1  Form  of Indemnification Agreement and Schedule of Indemnified Parties.(1)

10.2  [Reserved]

10.3  Form  of  Tax  Indemnification Agreement, between and among the Registrant
      and  the  Existing  Shareholders.(1)

10.4  1996  Stock  Option  Plan.(1)

10.5  Lease  for  730  West  Foothill  Boulevard, Azusa, California, dated as of
      December  1,  1995,  by and between the Registrant as Tenant and HKJ Gold,
      Inc.  as  Landlord,  as  amended(1).

10.6  Lease for 13023 Hawthorne Boulevard, Hawthorne, California, dated April 1,
      1994,  by  and  between  the  Registrant  as  Tenant and HKJ Gold, Inc. as
      Landlord,  as  amended.(1)

10.7  Lease for 6161 Atlantic Boulevard, Maywood, California, dated November 11,
      1985,  by  and between the Registrant as Lessee and David and Sherry Gold,
      among  others,  as  Lessors.(1)

10.8  Lease  for  14139  Paramount Boulevard, Paramount, California, dated as of
      March  1 1996, by and between the Registrant as Tenant and 14139 Paramount
      Properties  as  Landlord,  as  amended.(1)

10.9  Release  Agreement, dated March 25, 1996, regarding 11382 Beach Boulevard,
      Stanton,  California,  by  and  between  the  Registrant  and  11382 Beach
      Partnership.(1)

10.10 Lease  for  6124  Pacific  Boulevard,  Huntington  Park, California, dated
      January  31,  1991,  by and between the Registrant as Tenant and David and
      Sherry  Gold  as  the  Landlord,  as  amended.(1)

10.11 Lease  for 14901 Hawthorne Boulevard, Lawndale, California, dated November
      1,  1991,  by  and  between Howard Gold, Karen Schiffer and Jeff Gold, dba
      14901  Hawthorne  Boulevard  Partnership as Landlord and the Registrant as
      Tenant,  as  amended.(1)

10.12 Lease for 5599 Atlantic Avenue, North Long Beach, California, dated August
      13,  1992,  by  and between the Registrant as Tenant and HKJ Gold, Inc. as
      Landlord,  as  amended.(1)

10.13 Lease  for  1514  North  Main  Street,  Santa Ana, California, dated as of
      November  12,  1993,  by  and  between the Registrant as Tenant and Howard
      Gold,  Jeff  Gold,  Eric J. Schiffer and Karen R. Schiffer as Landlord, as
      amended.(1)

10.14 Lease  for  6121  Wilshire Boulevard, Los Angeles, California, dated as of
      July  1,  1993, by and between the Registrant as Tenant and HKJ Gold, Inc.
      Landlord,  as amended; and lease for 6101 Wilshire Boulevard, Los Angeles,
      California, dated as of December 1, 1995, by and between the Registrant as
      Tenant  and  David  and  Sherry  Gold  as  Landlord,  as  amended.(1)


                                      -45-
<PAGE>
10.15 Lease  for  8625  Woodman  Avenue, Arleta, California, dated as of July 8,
      1993, by and between the Registrant as Tenant and David and Sherry Gold as
      Landlord,  as  amended.(1)

10.16 Lease  for 2566 East Florence Avenue, Walnut Park, California, dated as of
      April  18,  1994,  by  and  between  HKJ  Gold,  Inc.  as Landlord and the
      Registrant  as  Tenant,  as  amended.(1)

10.17 Lease for 3420 West Lincoln Avenue, Anaheim, California, dated as of March
      1,  1996,  by  and  between the Registrant as Tenant and HKJ Gold, Inc. as
      Landlord,  as  amended.(1)

10.18 Master  Lease  for  4000  East  Union  Pacific  Avenue,  City of Commerce,
      California  ("Warehouse  and  Distribution  Facility  Lease"), dated as of
      December  20, 1993, by and between the Registrant as Lessee and TBC Realty
      II  Corporation  ("TBC")  as  Lessor, together with Lease Guaranty ("Lease
      Guaranty"),  dated December 20, 1993, by and between Sherry and David Gold
      and  TBC  with  respect  thereto  and Letter Agreement, dated December 15,
      1993,  among  Registrant,  The Mead Corporation, TBC and Citicorp Leasing,
      Inc.  with  respect  to  the  Lease  Guaranty.(1)

10.10 Hawaiian  Gardens  Indemnity Agreement, dated as of March 25, 1996, by and
      between  the  Registrant  and  HKJ  Gold,  Inc.(1)

10.20 North  Broadway  Indemnity  Agreement,  dated  as  of  May 1, 1996, by and
      between  HKJ  Gold,  Inc.  and  the  Registrant.(1)

10.21 Lease for 2606 North Broadway, Los Angeles, California, dated as of May 1,
      1996,  by  and  between  HKJ  Gold, Inc. as Landlord and the Registrant as
      Tenant.(1)

10.22 Grant  Deed  concerning 8625 Woodman Avenue, Arleta, California, dated May
      2,  1996,  made  by  David  Gold  and  Sherry  Gold  in  favor  of Au Zone
      Investments  #2,  L.P.,  a  California  limited  partnership.(1)

10.23 Grant  Deed  concerning  6101 Wilshire Boulevard, Los Angeles, California,
      dated  May 2, 1996, made by David Gold and Sherry Gold in favor of Au Zone
      Investments  #2,  L.P.,  a  California  limited  partnership.(1)

10.24 Grant Deed concerning 6124 Pacific Boulevard, Huntington Park, California,
      dated  May 2, 1996, made by David Gold and Sherry Gold in favor of Au Zone
      Investments  #2,  L.P.,  a  California  limited  partnership.(1)

10.25 Grant  Deed  concerning  14901  Hawthorne Boulevard, Lawndale, California,
      dated  May  2,  1996, made by Howard Gold, Karen Schiffer and Jeff Gold in
      favor  of  Au  Zone  Investments  #2,  L.P.,  a  California  limited
      partnership.(1)

10.26 Services  Agreement,  dated  as  of  December  28,  2000,  by  and between
      Universal  International,  Inc.  and  the  registrant.  (2)

10.27 Lease  for  955  West Sepulveda, Los Angeles, California, dated as of July
      17,  1995,  by  and  between  Schwartz Investment Co., as successor to VAT
      Partners  II,  as  Landlord  and  the  Registrant  as  Tenant.  *

23.1  Consent  of  PriceWaterhouseCoopers  LLP.*


                                      -46-
<PAGE>
99.1  Certification  of  Chief  Executive Officer pursuant to Section 906 of the
      Sarbanes-Oxley  Act  of  2002  dated  March  31,  2003*

99.2  Certification  of  Chief  Financial Officer pursuant to Section 906 of the
      Sarbanes-Oxley  Act  of  2002  dated  March  31,  2003*



*  Filed  herewith

(1)   Incorporated  by  reference  from  the Company's Registration Statement on
      Form  S-1  as filed with the Securities and Exchange Commission on May 21,
      1996.

(2)Incorporated  by  reference  from  the Company's Current Report on Form 8K as
      filed  with  the  Securities  and Exchange Commission on January 12, 2001.


                                      -47-
<PAGE>