Market Overview

Fred's Reports August Sales

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August comparable store sales decreased 0.5%

Pharmacy comps continue to trend positively; GDR increased 105 basis
points

Fred's, Inc. ("Fred's", "Fred's Pharmacy" or the "Company")
(NASDAQ:FRED) today reported sales for the four-week fiscal month of
August, which ended August 26, 2017.

Fred's total sales for the month decreased to $153.0 million from $159.7
million in August 2016. The decrease in total sales is related primarily
to the closure of 39 underperforming stores in the first quarter. Total
comparable store sales for the month saw a slight decrease of 0.5%,
compared with a 3.0% decrease in comparable sales in the prior year
period. Comparable store sales for August were negatively impacted by
the continued increase in Generic Dispensing Rate as well as a 0.5%
impact from the sale of low productive discontinued inventory versus
August of last year.

Michael K. Bloom, Chief Executive Officer, said, "Total comparable store
sales for August show continued improvement from trends over the past 12
months, and overall pharmacy comps remained positive in August. Front
Store showed positive comp growth in our General Merchandise, Healthcare
and Beauty categories, which were offset by market headwinds in the core
consumables categories. We are encouraged by the momentum resulting from
the turnaround efforts that are under way."

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 600 pharmacy and general merchandise stores,
which includes 14 franchised Fred's Pharmacy locations and an additional
three specialty pharmacy-only 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.

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. A reader can identify forward-looking
statements because they are not limited to historical facts or they use
such words as "outlook," "guidance," "may," "should," "could,"
"believe," "anticipate," "plan," "expect," "estimate," "forecast,"
"goal," "intend," "committed," "continue," or "will likely result" and
similar expressions that concern the Company's strategy, plans,
intentions or beliefs about future occurrences or results. These risks
and uncertainties include, but are not limited to, those associated with
the Company's announced strategic plan, the success of announced
acquisition activities and future growth trends in businesses acquired;
general economic trends; changes in consumer demand or purchase
patterns; delays or interruptions in the flow of merchandise between the
Company's distribution centers and its stores or between the Company's
suppliers and same; a disruption in the Company's data processing
services; cyber-security threats; costs and delays in acquiring or
developing new store sites; and the factors listed under "Risk Factors"
in the Company's most recent Annual Report on Form 10-K and any
subsequent quarterly filings on Form 10-Q filed with the Securities and
Exchange Commission. Forward-looking statements speak only as of the
date made. The Company 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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