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Fred's Pharmacy Reports April Sales

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Fred's, Inc. ("Fred's Pharmacy" or the "Company") (NASDAQ:FRED) today
reported sales for the four-week fiscal month of April and the first
quarter of fiscal 2017, which ended April 29, 2017.

Fred's total sales for the month decreased 3.0% year-over-year to $159.1
million from $163.9 million in April 2016. Total comparable store sales
for the month increased 1.2% compared with a 0.3% increase in comparable
sales in the prior year period. Comparable store sales for April
included a negative 1.0% impact as a result of the sale of low
productive discontinued inventory versus April of last year. The April
2017 comparable store sales reflected double digit growth for Easter
seasonal categories, which was the result of the shift of the Easter
holiday from March 27 last year to April 16 this year.

Fred's total sales for the first quarter of fiscal 2017 decreased 3.0%
to $532.9 million compared with $549.5 million for the same period last
year. The Company closed 39 underperforming stores in the quarter. On a
comparable store basis, year-to-date sales decreased 1.2% versus an
increase of 1.0% for the year-earlier period. Comparable store sales for
the quarter included a negative 1.4% impact as a result of the sale of
low productive discontinued inventory versus the same quarter last year.

Commenting on the announcement, Michael K. Bloom, Chief Executive
Officer, said, "The Fred's Pharmacy healthcare transformation is well
under way as we continue to experience sequential sales improvement. The
initiatives we began implementing in 2016 and early 2017 are taking hold
and laying the foundation for continued success. We have created
substantial momentum in our Pharmacy businesses as we make the strategic
shift to focus on healthcare, with Specialty Pharmacy sales growing
double digits and driving our consolidated pharmacy comparable sales. In
Retail Pharmacy, we are seeing sequential growth in adjusted script
comps, while our generic dispensing rate has increased as we continue
our focus on more profitable scripts. We remain confident in the Fred's
Pharmacy plan to improve our performance, and are already realizing the
benefits of our comprehensive strategy and talented management team."

About Fred's Pharmacy

Tracing its history back to an original store in Coldwater, Mississippi,
opened in 1947, today Fred's Pharmacy is headquartered in Memphis,
Tennessee, and operates 601 pharmacy and general merchandise stores and
three specialty pharmacy-only locations, including 14 franchised Fred's
Pharmacy locations. With a unique store format and strategy that
combines the best elements of a healthcare-focused drug store with a
value-focused retailer, Fred's Pharmacy stores offer more than 12,000
frequently purchased items that address the healthcare and everyday
needs of its customers and patients. This includes nationally recognized
brands, proprietary Fred's Pharmacy label products, and a full range of
value-priced selections. The company has two distribution centers, one
in Memphis, Tennessee, and Dublin, Georgia.

On December 20, 2016, Fred's Pharmacy announced that it signed an
agreement with Walgreens Boots Alliance, Inc. (NASDAQ:WBA) and Rite Aid
Corporation (NYSE:RAD) to purchase 865 stores and certain assets
related to store operations located across the eastern and western
United States for $950 million in cash. Closing of the transaction is
conditioned on the completion of Walgreens Boots Alliance's proposed
acquisition of Rite Aid, approval by the Federal Trade Commission, as
well as customary regulatory approvals and closing conditions.

For more information about the Company, visit Fred's website at www.fredsinc.com.

Forward-Looking Statements

Comments in this news release that are not historical facts are
forward-looking statements that involve risks and uncertainties that
could cause actual results to differ materially from those projected in
the forward-looking statements. The words "outlook", "guidance", "may",
"should", "could", "believe", "anticipate", "project", "plan", "expect",
"estimate", "objective", "forecast", "goal", "intend", "will likely
result", or "will continue" and similar expressions generally identify
forward-looking statements. All forward-looking statements are
inherently uncertain, and concern matters that involve risks and other
factors that may cause the actual performance of the Company to differ
materially from the performance expressed or implied by these
statements. Therefore, forward-looking statements should be evaluated in
the context of these uncertainties and risks, including but not limited
to the competitive nature of the industries in which we operate; the
implementation of our strategic plan, and its impact on our sales, costs
and operations; utilizing our existing and new stores and increasing our
pharmacy department presence in new and existing stores; our reliance on
a single supplier of pharmaceutical products; our pharmaceutical drug
pricing; reimbursement rates and the terms of our agreements with
pharmacy benefit management companies; our private brands; the
seasonality of our business and the impact of adverse weather
conditions; operational difficulties; merchandise supply and pricing;
consumer demand and product mix; delayed openings and operating new
stores and distribution facilities; our employees; risks relating to
payment processing; our computer system, and the processes supported by
our information technology infrastructure; our ability to protect the
person information of our customers and employees; cyber-attacks;
changes in governmental regulations; the outcome of legal proceedings,
including claims of product liability; insurance costs; tax assessments
and unclaimed property audits; current economic conditions; changes in
third-party reimbursements; the terms of our existing and future
indebtedness; our acquisitions and the ability to effectively integrate
businesses that we acquire, including risks related to the possibility
that transactions may not close, including because one or more closing
conditions to such transactions, including certain regulatory approvals,
may not be satisfied or waived, on a timely basis or otherwise,
including that a governmental entity may prohibit, delay or refuse to
grant approval for the consummation of such transactions, or may require
conditions, limitations or restrictions in connection with such
approvals; the risk that the businesses and acquired stores, as
applicable, will not be integrated successfully; the risk of litigation
and/or regulatory actions related to such proposed transaction; our
ability to pay dividends; and the factors listed under "Risk Factors" in
the Company's most recent Annual Report on Form 10-K and any subsequent
filings with the Securities and Exchange Commission.

Forward-looking statements speak only as of the date made. Consequently,
all forward-looking statements are qualified by this cautionary
statement. Readers should not place undue reliance on any
forward-looking statements. Fred's undertakes no obligation to release
revisions to these forward-looking statements to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unforeseen events, except as required to be reported under the rules and
regulations of the Securities and Exchange Commission.

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