SCHEDULE 14A
(RULE 14A-101)

INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. _____)

Filed by the registrant [X]

Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the
[X] Definitive Proxy Statement Commission Only (as permitted by
[ ] Definitive Additional Materials Rule 14a-6(e)(2)
[ ] Soliciting Material Under
Rule 14a-12

99 CENTS ONLY STORES
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)

- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):
[X] No Fee Required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(1) Title of each class of securities to which transaction applies:

- -------------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:

- -------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:

- -------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:

- -------------------------------------------------------------------------------
(5) Total fee paid:

- -------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials:

[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.

(1) Amount previously paid:

- -------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:

- -------------------------------------------------------------------------------
(3) Filing party:

- -------------------------------------------------------------------------------
(4) Date filed:

- -------------------------------------------------------------------------------

99 CENTS ONLY STORES

-----------------------------------------------------

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
-----------------------------------------------------

TIME

10:00 a.m. on Wednesday, May 16, 2001

PLACE

4000 Union Pacific Avenue
City of Commerce, California 90023

ITEMS OF BUSINESS

(1) To elect a Board of nine Directors to hold office until the next
Annual Meeting of Shareholders and until his or her successor is
elected.

(2) To consider and act upon a shareholder proposal.

(3) To transact such other business as may properly come before the
Annual Meeting and any adjournments or postponements thereof.

RECORD DATE

You can vote if at the close of business on March 26, 2001 you were a
shareholder of record.

PROXY VOTING

ALL SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN
PERSON. HOWEVER, TO ENSURE YOUR REPRESENTATION AT THE ANNUAL MEETING,
YOU ARE URGED TO COMPLETE AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS
POSSIBLE. IF YOU RECEIVE MORE THAN ONE PROXY CARD BECAUSE YOU OWN
SHARES REGISTERED IN DIFFERENT NAMES OR AT DIFFERENT ADDRESSES, EACH
CARD SHOULD BE COMPLETED AND RETURNED.

/S/ ERIC SCHIFFER

April 12, 2001 Eric Schiffer
ASSISTANT CORPORATE SECRETARY

Page 2

99 CENTS ONLY STORES
4000 UNION PACIFIC AVENUE
CITY OF COMMERCE, CALIFORNIA 90023

PROXY STATEMENT

This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of 99 Cents Only Stores, a California corporation ("99
Cents Only Stores," the "Company," "we," or "us"), of proxies to be voted at our
2001 annual meeting of shareholders and at any adjournments or postponements
thereof.

You are invited to attend our annual meeting of shareholders on
Wednesday, May 16, 2001, beginning at 10:00 a.m. Pacific Standard Time (the
"Annual Meeting"). The meeting will be held at the Company's offices at 4000
Union Pacific Avenue, City of Commerce, California 90023.

SHAREHOLDERS ENTITLED TO VOTE. The close of business on March 26, 2001, has been
fixed as the record date for the determination of shareholders entitled to
notice of and to vote at the Annual Meeting and any postponements or
adjournments thereof. At the record date, 51,416,724 shares of the Company's
common stock, no par value (the "Common Stock"), were outstanding. The Common
Stock is the only outstanding class of securities entitled to vote at the Annual
Meeting. At the record date, the Company had approximately 8,520 shareholders,
which includes 486 shareholders of record.

PROXIES. Your vote is important. If your shares are registered in your name, you
are a share owner of record. If your shares are in the name of your broker or
bank, your shares are held in street name. We encourage you to vote by proxy so
that your shares will be represented and voted at the meeting even if you cannot
attend. All share owners can vote by written proxy card. Your submitting the
enclosed Proxy will not limit your right to vote at the annual meeting if you
later decide to attend in person. If your shares are held in street name, you
must obtain a Proxy, executed in your favor, from the holder of record to be
able to vote at the meeting. If you are a record holder, you may revoke your
Proxy at any time before the meeting either by filing with the Secretary of the
Company, at its principal executive offices, a written notice of revocation or a
duly executed Proxy bearing a later date, or by attending the annual meeting and
expressing a desire to vote your shares in person. If no instruction is
specified on the enclosed Proxy with respect to a matter to be acted upon, the
shares represented by the Proxy will be voted (i) in favor of the election of
the nominees for director set forth herein, (ii) against the shareholder
proposal, and (iii) if any other business is properly presented at the Annual
Meeting, in accordance with the recommendations of the Board of Directors. It is
anticipated that this Proxy Statement and the accompanying Proxy will be mailed
to shareholders on or about April 12, 2001.

QUORUM. The presence, in person or by proxy, of a majority of the votes entitled
to be cast by the shareholders entitled to vote at the annual meeting is
necessary to constitute a quorum. Abstentions and broker non-votes will be
included in the number of shares present at the Annual Meeting for determining
the presence of a quorum.

VOTING. A shareholder is entitled to cast one vote for each share held of record
on the record date on all matters to be considered at the Annual Meeting.
Abstentions will be counted toward the tabulation of votes cast on proposals
submitted to shareholders and will have the same effect as negative votes, while
broker non-votes will not be counted as votes cast for or against such matters.

ELECTION OF DIRECTORS. The election of the directors will require the
affirmative vote of a plurality of the shares of Common Stock present and voting
at the Annual Meeting.

SHAREHOLDER PROPOSAL. Approval of the shareholder proposal will require the
affirmative vote of a majority of the shares of Common Stock present and voting
at the Annual Meeting.

OTHER MATTERS. All other matters that may properly come before the meeting
require for approval the favorable vote of a majority of shares voting at the
meeting in person or by proxy. At the date this proxy statement went to press,
we do not know of any other matter to be raised at the Annual Meeting.

Page 2

ITEM 1: ELECTION OF DIRECTORS
- -------------------------------------------------------------------------------

In accordance with the Bylaws of the Company, 99 Cents Only Stores'
directors are elected at each Annual Meeting and hold office until the next
Annual Meeting and until their successors are elected and qualified. The Bylaws
of the Company provide that the Board of Directors shall consist of no less than
seven and no more than eleven directors as determined from time to time by the
Board of Directors. The Board of Directors currently consists of nine directors.

Unless otherwise instructed, the Proxy holders will vote the Proxies
received by them for the nominees named below. If any nominee is unable or
unwilling to serve as a director at the time of the Annual Meeting or any
adjournments thereof, the Proxies will be voted for such other nominee(s) as
shall be designated by the current Board of Directors to fill any vacancy. The
Company has no reason to believe that any nominee will be unable or unwilling to
serve if elected as a director.

The Board of Directors proposes the election of the following nominees
as directors:

William Christy
Lawrence Glascott
David Gold
Howard Gold
Jeff Gold
Marvin Holen
Eric Schiffer
Ben Schwartz
John Shields

If elected, each nominee is expected to serve until the 2002 Annual
Meeting of Shareholders and thereafter until his or her successor is duly
elected and qualified. The nine nominees for election as directors at the Annual
Meeting who receive the highest number of affirmative votes will be elected.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR"
THE ELECTION OF THE NOMINEES LISTED ABOVE.

Page 3

INFORMATION WITH RESPECT TO NOMINEES AND EXECUTIVE OFFICERS

The following table sets forth certain information with respect to the
nominees and executive officers of the Company as of March 31, 2001:

YEAR
FIRST
ELECTED
AGE AT OR
MARCH 31, APPOINTED
NAME: 2001 DIRECTOR PRINCIPAL OCCUPATION
- --------------------- --------- --------- -------------------------------------------------

NOMINEES:

David Gold 68 1965 DAVID GOLD has been Chairman of the Board and
Chief Executive Officer of the Company since the
founding of the Company in 1965. Mr. Gold has
over 45 years of retail experience.

Howard Gold 41 1991 HOWARD GOLD has been a director of the Company
since 1991. He joined the Company in 1982 and
has served in various managerial capacities. He
currently serves as Senior Vice President of
Distribution. Mr. Gold received his B.S. degree
from the University of California at Los Angeles
in 1984.

Eric Schiffer 40 1991 ERIC SCHIFFER has been a director of the Company
since 1991. He joined the Company in 1991 and
has served in various managerial capacities. In
March 2000, he was promoted to President. Prior
to joining the Company, from 1987 to 1992, he
was employed by Oxford Partners, a venture
capital firm. Mr. Schiffer received his B.S.E.
degree from Duke University in 1983 and his
M.B.A. from Harvard Business School in 1987.

Jeff Gold 33 1991 JEFF GOLD has been a director of the Company
since 1991. He joined the Company in 1984 and
has served in various managerial capacities. He
currently serves as Senior Vice President of
Real Estate and Information Systems. Mr. Gold
received his B.A. degree from the University of
California at Berkeley in 1989.

William O. Christy 69 1992 WILLIAM O. CHRISTY has been a director of the
Company since 1992. He was President and Chief
Executive Officer of Certified Grocers of
California from 1977 until his retirement in
1990. He has served on numerous trade
association boards including the executive
committee of the National Grocers Association
Board and Chairman of the Merchant and
Manufacturer Association Board.

Marvin Holen 71 1991 MARVIN HOLEN has been a director of the Company
since 1991. He is an attorney and in 1960
founded the law firm of Van Petten & Holen. He
served on the Board of the Southern California
Rapid Transit District from 1976 to 1993 (six of
those years as the Board's President). He served
on the Board of Trustees of California Blue
Shield from 1972 to 1978, on the Board of United
California Savings Bank from 1992 to 1994 and on
several other corporate, financial institution
and philanthropic boards of directors.

Page 4

Ben Schwartz 83 1993 BEN SCHWARTZ has been a director of the Company
since 1993. He was Chairman of Foods Company
Markets, a supermarket chain, from 1980 until it
was acquired in 1987 by Boys Markets. Prior
thereto, he served for many years as its
president. He served on the Board of Directors
of Certified Grocers of California, including
four years as Chairman. Additionally, Mr.
Schwartz sits on a number of industry trade
boards, including the Food Marketing Institute.

John Shields 69 2001 JOHN SHIELDS was appointed to the Board of
Directors in January 2001. He has been Chief
Executive Officer of Trader Joe's since 1989.
Trader Joe's Company is a Southern California
based privately held 156 store retail chain.
From 1978 to 1987 he was Vice President of
Operations for Mervyn's Department Stores. Prior
to that he spent 20 years with Macy's,
ultimately as Senior Vice President of
Operations. In 1993 he was Entrepreneur of the
Year for Los Angeles and in 1994 he was honored
as retailer of the year.

Lawrence Glascott 66 1996 LAWRENCE GLASCOTT has been a director of the
Company since October 1996. From 1991 to 1996 he
was the Vice President - Finance of Waste
Management International, an environmental
services company. Prior thereto, Mr. Glascott
was a partner at Arthur Andersen LLP and was the
Arthur Andersen LLP partner in charge of the 99
Cents Only Stores account for six years.
Additionally, Mr. Glascott was in charge of the
Los Angeles based Arthur Andersen LLP Enterprise
Group practice for over 15 years.
OTHER EXECUTIVE OFFICERS:

Helen Pipkin 58 HELEN PIPKIN joined the Company in 1991 and
serves as Senior Vice President of Wholesale
Operations. Prior to joining the Company, from
1985 through 1991, Ms. Pipkin served as
Controller and Manager of Wholesale and Import
Operations of Cobra Associated International, a
wholesaler of variety merchandise. Prior to
1985, for many years, Ms. Pipkin was an owner,
Vice President and Controller of Markell
Imports, a general merchandise wholesaler.

Andy Farina 54 ANDY FARINA joined the Company in September 1996
and serves as Chief Financial Officer. Prior to
joining the Company, from April 1993 through
August 1996, Mr. Farina was Vice President of
Finance of Crown BBK, Inc., a food brokerage
business. Mr. Farina was employed by a division
of Sara Lee from 1976 through 1988, ultimately
in the capacity of President. Mr. Farina began
his career with Arthur Andersen LLP.

Jose Gomez 41 JOSE GOMEZ joined the Company in 1980 and has
served in many different managerial capacities,
most recently as Vice President of Retail
Operations. He has over 20 years of retail
experience.

David Gold is the father of Howard Gold and Jeff Gold and the
father-in-law of Eric Schiffer.

Page 5

FURTHER INFORMATION CONCERNING THE BOARD OF DIRECTORS

BOARD MEETINGS AND COMMITTEES

The Board of Directors held a total of 12 meetings during the fiscal
year ended December 31, 2000. The Board of Directors has an Audit Committee and
a Compensation Committee. During the fiscal year ended December 31, 2000, each
director during the term of his tenure, attended all meetings of the Board of
Directors held. Each director also attended all meetings of the committees of
the Board of Directors on which he served.

The Audit Committee met three times and the Compensation Committee met
three times during the fiscal year ended December 31, 2000. The Audit
Committee's functions include recommending to the Board of Directors the
engagement of the Company's independent accountants, discussing the scope and
results of the audit with the accountants, discussing the Company's financial
accounting and reporting principles and the adequacy of the internal audits with
management and reviewing and evaluating the Company's accounting policies and
internal accounting controls. The Compensation Committee reviews and approves
the compensation of officers and key employees, including the granting of awards
under the Company's stock option plan. The members of the Audit Committee are
Messrs. Christy, Schwartz and Glascott and the members of the Compensation
Committee are Messrs. Christy, Holen, Glascott and Shields. The Company does not
have a standing nominating committee.

COMPENSATION OF DIRECTORS

Each director who is not an officer of or otherwise employed by the
Company (an "Outside Director") receives an automatic annual grant on May 1 of a
non-qualified option to purchase 3,000 shares of Common Stock with a per share
exercise price equal to the fair market value of a share of the Company's Common
Stock on the date of grant. In addition, each Outside Director receives $1,500
per month, plus $500 for each board meeting attended plus $150 for each
committee meeting attended on a day when no board meeting is held, or $250 for
each committee meeting attended as committee chairperson.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Company has no interlocking relationships involving any of the
members of its Compensation Committee which would be required by the Securities
and Exchange Commission (the "Commission") to be reported in this Proxy
Statement, and no officer or employee of the Company serves on its Compensation
Committee.

ITEM 2: SHAREHOLDER PROPOSAL
- -------------------------------------------------------------------------------

Aaron Merle Epstein, 13455 Ventura Boulevard #209, Sherman Oaks,
California 91423-6122, owning 113 shares of Common Stock of the Company, has
notified the Company of his intent to introduce the following proposal at the
annual meeting. "Whereas: Consumers and shareholders continue to be concerned
about whether low wages and abusive working conditions exist in facilities where
the products they buy, produced or assembled. Resolved: Shareholders request the
Board of Directors adopt the following Vendor Standards to be inserted in all
purchasing contracts with its vendors.

99 Cents Only Stores - Statement of Vendor Standards-99 Cents Only Stores has a
tradition of conducting its business in an ethical manner that reflects our
respect for the public franchise under which we operate. As such we are
concerned with the worldwide state of being of human rights and environmental
degradation . We expect that the vendors with whom we source our products to
share these same ethical concerns as well. 99 Cents Only Stores will use the
following Standards of Vendor Engagement in selecting vendors and will seek
compliance with these standards by our contractors, subcontractors, suppliers,
and other businesses. 99 Cents Only Stores will seek vendors that will allow us
full knowledge of the facilities used in production. We reserve the right to
undertake affirmative measures, such as on-site inspection of production
facilities in order to implement and monitor these standards. Any effort to
suppress any of these standards will be met with strong objection on our part
and we will take into account any such actions on the part of our vendors when
reviewing and evaluating our business relationships.

Page 6

ITEM 2: SHAREHOLDER PROPOSAL (CONTINUED)
- -------------------------------------------------------------------------------

Safe and Healthy Workplace - 99 Cents Only Stores will seek vendors who provide
their employees with a safe and healthy workplace in compliance with local laws.
Forced or Compulsory Labor - 99 Cents Only Stores will not knowingly use vendors
that use forced or other compulsory labor in the manufacture of products
intended for our stores. This includes labor that is required as a means of
political coercion or as punishment for holding or for peacefully expressing
political views. Disciplinary Practices - 99 Cents Only Stores will not
knowingly use vendors who use corporal punishment or other forms of mental or
physical coercion. Non-discrimination - 99 Cents Only Stores recognizes and
respects the cultural differences found in the worldwide marketplace. However,
we believe that workers should be employed on the basis of their ability to
carry out the duties of a particular job, rather than on the basis of personal
characteristics or beliefs. We will seek vendors who share this belief. Working
Hours and Overtime - 99 Cents Only Stores will seek vendors who do not require
more than 60 hour work weeks on a regularly scheduled basis, except for
appropriately compensated overtime in compliance with local laws. Fair Wages -
99 Cents Only Stores will seek vendors who share our commitment to the
betterment of wage and benefit levels that address the basic needs of workers
and their families so far as possible and appropriate in light of national
practices and conditions. Child Labor - 99 Cents Only Stores will seek vendors
who do not use child labor. 99 Cents Only Stores will expect its vendors to
comply with the law of the country of origin in defining the term "child", but
we will not knowingly use vendors that use labor for persons under the age of 14
regardless of the law of the country of origin. 99 Cents Only Stores will
support the development of legitimate workplace apprenticeship programs for the
educational benefit of younger people as long as the child is not being
exploited or given jobs that are dangerous to the child's health or safety.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE AGAINST
THIS PROPOSAL FOR THE FOLLOWING REASONS:

The Company recognizes its responsibility to engage in business with
vendors that have strong business ethics and regard for human rights. The
Company also believes that substantial progress has been made in improving
international human rights through a combination of cooperative efforts between
business and the local government's to improve living standards and awareness
and education or human rights. The Company believes its business activities are
consistent with the objectives of good business ethics and that the Company has
performed responsibly. The Board of Directors believes that the proposed
resolution is not warranted.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE ADOPTION OF THIS
PROPOSAL. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE VOTED AGAINST THIS
PROPOSAL UNLESS OTHERWISE SPECIFIED BY THE SHAREHOLDER IN THE PROXY.

Page 7

EXECUTIVE COMPENSATION
- -------------------------------------------------------------------------------

SUMMARY COMPENSATION TABLE

The following table sets forth, as to the Chief Executive Officer and as
to each of the other four most highly compensated officers whose compensation
exceeded $100,000 during the last fiscal year (the "Named Executive Officers"),
information concerning all compensation paid for services to the Company in all
capacities during the last three fiscal years or accrued within the current
fiscal year.

LONG-TERM
FISCAL COMPENSATION
YEAR NUMBER OF
ENDED ANNUAL COMPENSATION SECURITIES
DECEMBER --------------------- UNDERLYING
NAME AND PRINCIPAL POSITION 31, SALARY BONUS OPTIONS (A)
- --------------------------- -------- -------- --------- ------------

David Gold................ 2000 $168,300 - -
Chairman of the Board 1999 175,000 - -
and Chief Executive 1998 175,000 - -
Officer

Andrew Farina ............ 2000 $141,500 $20,000 22,500
Chief Financial Officer 1999 128,000 15,000 30,000
1998 120,000 12,000 37,500

Jose Gomez................ 2000 $160,200 $25,000 22,500
Vice President of 1999 159,600 25,000 30,000
Retail Operations 1998 131,000 25,000 37,500

Helen Pipkin.............. 2000 $137,700 $20,000 22,500
Senior Vice President 1999 145,800 20,000 30,000
of Wholesale 1998 135,200 25,000 37,500
Operations

Eric Schiffer ............ 2000 $120,800 - -
President 1999 120,000 -
1998 120,000 - -
<FN>
(a) The number of securities underlying the options in the above table as well
as in the Option Grants in The Last Fiscal Year table and the Aggregated Options
Exercised in the Last Fiscal Year and Year-End Values table have been adjusted
to reflect the Company's 3 for 2 stock split attributed March 20, 2001 to
shareholders of record on March 14, 2001.
</FN>

Page 8

OPTION GRANTS IN LAST FISCAL YEAR

The following table sets forth certain information regarding the grant
of stock options made during the fiscal year ended December 31, 2000 to the
Named Executive Officers.

POTENTIAL
PERCENT REALIZABLE VALUE
OF TOTAL AT ASSUMED ANNUAL
NUMBER OF OPTIONS RATES OF STOCK PRICE
SECURITIES GRANTED TO APPRECIATION FOR
UNDERLYING EMPLOYEES OPTION TERM(a)
OPTION IN FISCAL EXERCISE OR EXPIRATION --------------------
NAME GRANTED(b) YEAR(c) BASE PRICE DATE 5% 10%
---- ---------- --------- ----------- ---------- -------- --------

David Gold............. - - - - - -
Jose Gomez............. 22,500 1.8% $ 22.67 5/04/10 $320,736 $812,809
Helen Pipkin........... 22,500 1.8% 22.67 5/04/10 320,736 812,809
Andrew Farina.......... 22,500 1.8% 22.67 5/04/10 320,736 812,809
Eric Schiffer.......... - - - - - -
<FN>

(a) The potential realizable value is based on the assumption that the Common
Stock appreciates at the annual rate shown (compounded annually) from the
date of grant until the expiration of the option term. These amounts are
calculated pursuant to applicable requirements of the Commission and do
not represent a forecast of the future appreciation of the Common Stock.
(b) The option grants set forth on this chart vest in three equal annual
installments beginning on May 4, 2001.
(c) Options covering an aggregate of 1,241,041 shares were granted to eligible
persons during the fiscal year ended December 31, 2000.
</FN>

STOCK OPTIONS HELD AT FISCAL YEAR END

The following table sets forth, for each of the Named Executive
Officers, certain information regarding the number of shares of Common Stock
underlying stock options held at fiscal year end and the value of options held
at fiscal year end based upon the last reported sales price of the Common Stock
on the New York Stock Exchange on December 31, 2000 ($18.25 per share).

AGGREGATED OPTIONS EXERCISED IN THE LAST FISCAL YEAR AND YEAR-END VALUES

NUMBER OF SECURITIES NUMBER OF SECURITIES
UNDERLYING EXERCISED UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT OPTIONS AT IN-THE-MONEY OPTIONS
DECEMBER 31, 2000 DECEMBER 31, 2000 AT DECEMBER 31, 2000(a)
-------------------- -------------------------- --------------------------
VALUE
NAME SHARES REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------- -------- -------- ----------- ------------- ----------- -------------

David Gold...... - - - - - -
Jose Gomez...... 37,500 $968,113 91,254 55,000 $742,381 $39,373
Helen Pipkin.... 44,175 $723,116 17,002 55,000 238,800 39,373
Andrew Farina... - - 77,190 55,000 588,253 39,373
Eric Schiffer... - - 56,253 - 729,686 -
<FN>
(a) Based on the last reported sale price of the Common Stock on the New York
Stock Exchange on December 31, 2000 ($18.25) less the option exercise
price.
</FN>

Page 9

REPORT OF THE COMPENSATION COMMITTEE
- -------------------------------------------------------------------------------

The Compensation Committee of the Board of Directors is responsible for
the review and administration of the Company's various compensation plans,
including determining base salaries for officers and administering the Company's
stock option plan and annual bonus plan.

COMPENSATION PHILOSOPHY. The Company's executive compensation program is
designed to (1) provide levels of compensation that integrate pay and incentive
plans with the Company's strategic goals, so as to align the interests of
executive management with the long-term interests of the Company's shareholders,
(2) attract, motivate and retain executives of outstanding abilities and
experience capable of achieving the strategic business goals of the Company, (3)
recognize outstanding individual contributions, and (4) provide compensation
opportunities which are competitive to those offered by other retail companies
of similar size and performance. To achieve these goals, the Company's executive
compensation program consists of three main elements: (i) base salary, (ii)
annual cash bonus and (iii) long-term incentives. Each element of compensation
has an integral role in the total executive compensation program. Given the
current share ownership of Messrs. David Gold, Howard Gold, Jeff Gold and Eric
Schiffer, these members of management have chosen not to receive bonuses or
stock option awards.

BASE SALARY. Base salaries are negotiated at the commencement of an
executive's employment with the Company and are reviewed annually. Base salaries
are designed to reflect the position, duties and responsibilities of each
executive officer, the cost of living in the area in which the officer is
located, the market for base salaries of similarly situated executives at other
companies engaged in businesses similar to that of the Company and the Company's
performance against its financial and strategic goals. Base salaries are
generally designed to be at the mid-range of salaries of comparable companies.
During the year ended December 31, 2000, David Gold served as the Company's
Chief Executive Officer. Mr. Gold's base salary of $175,000 was determined based
upon his service to the Company, the financial performance of the Company in the
year ended December 31, 2000, and the salaries received by similarly situated
executives at other companies. See "Executive Compensation -- Summary
Compensation Table."

ANNUAL CASH BONUSES. Executive officers and key members of management
are eligible to receive annual incentive bonuses from an executive bonus pool in
amounts determined at the discretion of the Board of Directors. The executive
bonus pool is calculated based on the Company's annual performance against a
business plan developed each year by senior management and reviewed and approved
by the Board of Directors. The executive bonus pool is capped at 3% of the
Company's operating profit. Funding of the bonus pool is determined based on a
performance matrix consisting of three variables: (i) the increase in store
sales during the subject year over store sales during the immediately preceding
year; (ii) operating income goals; and (iii) the individual performance of the
executives. Individual bonus targets for executives range from 0% to 20% of the
executive's base salary depending on the level of responsibility and attainment
of individual performance goals. Messrs. David Gold, Howard Gold, Jeff Gold and
Eric Schiffer have chosen not to receive an annual incentive bonus for 2000.

LONG-TERM INCENTIVES. The Company provides its executive officers with
long-term incentive compensation through grants of awards under the Company's
1996 Stock Option Plan. Under the 1996 Stock Option Plan, the Board of Directors
is authorized to grant any type of award which might involve the issuance of
shares of Common Stock, an option, warrant, convertible security, stock
appreciation right or similar right or any other security or benefit with a
value derived from the value of the Common Stock. The Compensation Committee of
the Board of Directors is currently responsible for selecting the individuals to
whom grants of awards will be made, the timing of grants, the determination of
the per share exercise price and the number of shares subject to each award. All
awards granted by the Compensation Committee pursuant to the 1996 Stock Option
Plan have been in the form of stock options. The Compensation Committee believes
that stock options provide the Company's executive officers with the opportunity
to purchase and maintain an equity interest in the Company and to share in the
appreciation of the value of the Common Stock. The Compensation Committee
believes that stock options directly motivate an executive to maximize long-term
shareholder value. The options incorporate vesting periods in order to encourage
key employees to continue in the employ of the Company. All options granted in
2000 were granted at the fair market value of the Company's Common Stock on the
date of grant. The Compensation Committee considers the grant of each option
subjectively, considering factors such as the individual performance of
executive officers and competitive compensation packages in the industry.
Messrs. David Gold, Howard Gold, Jeff Gold and Eric Schiffer, these members of
management have chosen not to receive bonuses or stock option awards.

Page 10

COMPENSATION DEFERRAL PLAN. Effective January 1, 2000 the Company
established a compensation deferral plan for highly compensated employees. Under
the compensation deferral plan participants may defer up to 80% of base pay.

OMNIBUS BUDGET RECONCILIATION ACT IMPLICATIONS FOR EXECUTIVE
COMPENSATION. Section 162(m) of the Internal Revenue Code of 1986, as amended
(the "Code"), places a limit of $1,000,000 on the amount of compensation that
may be deducted by the Company in any year with respect to the Chief Executive
Officer each of the Company's four most highly paid executive officers. Certain
"performance-based" compensation that has been approved by the Company's
shareholders is not subject to the deduction limit. The Company's 1996 Stock
Option Plan is intended to qualify so that awards under the plan constitute
performance-based compensation not subject to Section 162(m) of the Code. All
compensation paid to the Company's employees in fiscal 2000 will be fully
deductible.

SUMMARY. The Compensation Committee believes that its executive
compensation philosophy of paying the Company's executive officers by means of
base salaries, annual cash bonuses and long-term incentives (other than Messrs.
David Gold, Howard Gold, Jeff Gold and Eric Schiffer), as described in this
report, serves the interests of the Company and its shareholders.

COMPENSATION COMMITTEE
William Christy
Marvin Holen
Lawrence Glascott
John Shields

Page 11

REPORT OF THE AUDIT COMMITTEE
- -------------------------------------------------------------------------------

The Audit Committee of the Board of Directors, which consists entirely
of directors who meet the independence and experience requirements of the New
York Stock Exchange, has furnished the following report:

The Audit Committee assists the Board in overseeing and monitoring the
integrity of the Company's financial reporting process, its compliance with
legal and regulatory requirements and the quality of its internal and external
audit processes. The role and responsibilities of the Audit Committee are set
forth in a written Charter adopted by the Board, which is attached as Appendix A
to this Proxy Statement. The Audit Committee reviews and reassesses the Charter
annually and recommends any changes to the Board for approval.

The Audit Committee is responsible for overseeing the Company's overall
financial reporting process. In fulfilling its responsibilities for the
financial statements for fiscal year 2000, the Audit Committee:

1. Reviewed and discussed the audited financial statements for the
fiscal year ended December 31, 2000 with management and Arthur
Andersen LLP, the Company's independent auditors;

2. Discussed with Arthur Andersen LLP the matters required to be
discussed by Statement on Auditing Standards 61 relating to the
conduct of the audit; and

3. Received written disclosures and the letter from Arthur Andersen
LLP regarding its independence as required by Independence
Standards Board Standard Number 1. The Audit Committee discussed
with Arthur Andersen LLP their independence.

The Audit Committee also considered the status of pending litigation,
taxation matters and other areas of oversight relating to the financial
reporting and audit process that the Committee determined appropriate.

Based on the Audit Committee's review of the audited financial
statements and discussions with management and Arthur Andersen LLP, the Audit
Committee recommended to the Board that the audited financial statements be
included in the Corporation's Annual Report on Form 10-K for the fiscal year
ended December 31, 2000 for filing with the Securities and Exchange Commission.

AUDIT COMMITTEE

William Christy
Ben Schwartz
Lawrence Glascott

Page 12

PERFORMANCE GRAPH

The following graph sets forth the percentage change in cumulative total
shareholder return of the Company's Common Stock during the period from May 23,
1996 (the date of commencement of the Company's initial public offering) to
December 31, 2000, compared with the cumulative returns of the S&P Small Cap 600
Index and the Russell 2000 Index. The comparison assumes $100 was invested on
May 23, 1996 in the Common Stock and in each of the foregoing indices. The stock
price performance on the following graph is not necessarily indicative of future
stock price performance.

[GRAPH OMITTED]

Cumulative Total Return
-----------------------------------------------------------
5/23/1996 12/96 12/97 12/98 12/99 12/00
--------- ------ ------ ------ ------ ------

99 CENTS ONLY STORES 100.00 103.15 232.28 483.51 376.48 362.58
S & P SMALLCAP 600 100.00 108.53 136.29 140.01 157.38 156.26
RUSSELL 2000 100.00 113.18 149.15 139.52 137.45 132.62

Page 13

CERTAIN TRANSACTIONS WITH DIRECTORS AND EXECUTIVE OFFICERS

As of March 28, 2001, the Company leased 12 of its 104 store locations and a
parking lot associated with one of these stores from certain members of the Gold
family and their affiliates (the "Shareholders"). Annual rental expense for the
facilities owned by the Shareholders or their affiliates was approximately $2.2
million, $1.9 million and $1.9 million in 1998, 1999 and 2000, respectively. The
Company believes that such leases and contracts are no less favorable to the
Company than those an unrelated party would have provided after arm's-length
negotiations. It is the Company's current policy not to enter into real estate
transactions with the Shareholders or their affiliates, except with respect to
the renewal or modification of existing leases and occasions where such
transactions are determined to be in the best interests of the Company.
Moreover, all real estate transactions between 99 Cents Only Stores and the
Shareholders will require the unanimous approval of the independent directors on
the Company's Board of Directors and a determination by such independent
directors that such transactions are the equivalent of a negotiated arm's-length
transaction with a third party. There can be no guarantee that the Company and
the Shareholders or their affiliates will be able to agree on renewal terms for
the properties currently leased by the Company from the Shareholders, or, if
such terms are agreed to, that the independent directors on the Board of
Directors will approve such terms.

On September 30, 2000, the Board of Directors approved the sale of Universal
International, Inc. and Odd's-N-End's, Inc. (collectively, "Universal") to
Universal Deals, Inc. and Universal Odd's-N-End's, Inc., respectively. Both
Universal Deals, Inc. and Universal Odd's-N-End's are owned 100% by David and
Sherry Gold who are significant shareholders of 99 Cents Only Stores. Mr. Gold
is also Chairman and Chief Executive Officer 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 as determined by the parties and
approved by the Board of Directors of the Company. The sale was effective as of
the close of business on September 30, 2000. The Universal 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 continues to provide certain ongoing
administrative and other services to Universal pursuant to a Services Agreement.
99 Cents Only Stores receives a management fee of 6% of Universal's sales
revenue. In the fourth quarter of 2000, the Company received $1.4 million in
management fees under the Services Agreement with Universal. The Company has
also received $0.4 million in lease payments for rental of a distribution
facility to Universal. These amounts are included in total net selling, general
and administrative expenses of 99 Cents Only Stores in 2000.

Page 14

PRINCIPAL SHAREHOLDERS
- -------------------------------------------------------------------------------

The following table sets forth as of March 31, 2001, certain information
relating to the ownership of the Common Stock by (i) each person known by the
Company to be the beneficial owner of more than five percent of the outstanding
shares of the Company's Common Stock, (ii) each of the Company's directors,
(iii) each of the Named Executive Officers, and (iv) all of the Company's
executive officers and directors as a group. Except as may be indicated in the
footnotes to the table and subject to applicable community property laws, each
such person has the sole voting and investment power with respect to the shares
owned. The address of each person listed is in care of the Company, 4000 Union
Pacific Avenue, City of Commerce, California 90023.

NUMBER OF PERCENT
NAMES AND ADDRESSES SHARES(A) OF CLASS (A)
- ------------------- ---------- ------------

David Gold (b)(e)................... 14,620,022 28.50%
Sherry Gold (c)(e).................. 14,620,022 28.50%
Howard Gold (d)(e).................. 8,502,363 16.57%
Jeff Gold (d)(e).................... 8,502,363 16.57%
Eric and Karen Schiffer (e)(f)...... 8,558,616 16.68%
Au Zone Investments #3, LLC(e)...... 6,718,257 13.10%
William O. Christy (g).............. 42,689 *
Marvin Holen (h).................... 59,879 *
Ben Schwartz (i).................... 60,230 *
Lawrence Glascott (j)............... 28,626 *
Helen Pipkin (k).................... 50,126 *
Jose Gomez(l)....................... 121,253 *
Andrew Farina(m).................... 107,189 *
John Shields........................ 450 *
Myron Kaplan(n)..................... 4,122,624 8.02%
All of the Company's executive
officers and directors as a group,
12 persons(0)....................... 24,624,129 47.89%
<FN>
* Less than 1%

(a) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission that deem shares to be beneficially
owned by any person who has or shares voting or investment power with
respect to such shares. In computing the number of shares beneficially
owned by a person and the percentage ownership of that person, shares of
common stock subject to options held by that person that currently are
exercisable or exercisable within 60 days of March 31, 2001 are deemed
outstanding. Unless otherwise indicated, the persons named in this table
have sole voting and sole investment power for all shares shown as
beneficially owned, subject to community property laws where applicable.
(b) Includes 3,950,999 shares owned by Sherry Gold, David Gold's spouse, and
6,718,257 shares controlled through Au Zone Investments #3, LLC, a
California limited liability company ("Au Zone").
(c) Includes 3,950,999 shares owned by David Gold, Sherry Gold's spouse, and
6,718,257 shares controlled through Au Zone.
(d) Includes 6,718,257 shares controlled through Au Zone and 56,253 shares
reserved for issuance upon exercise of stock options which are exercisable.
(e) Au Zone is the general partner of Au Zone Investments #2, L.P., a
California limited partnership (the "Partnership"). The Partnership is the
registered owner of shares of Common Stock. The limited partners of the
Partnership are David Gold, Sherry Gold, Howard Gold, Jeff Gold and Karen
Schiffer. Each of the limited partners of the Partnership owns a 20%
interest in Au Zone.
(f) Includes 6,718,257 shares controlled through Au Zone and 112,506 shares
reserved for issuance upon exercise of stock options which are exercisable.
(g) Includes 41,127 shares of Common Stock reserved for issuance upon exercise
of stock options which are or will become exercisable on or before May 30,
2001.
(h) Includes 50,504 shares of Common Stock reserved for issuance upon exercise
of stock options which are or will become exercisable on or before May 30,
2001.
(i) Includes 31,754 shares of Common Stock reserved for issuance upon exercise
of stock options which are or will become exercisable on or before May 30,
2001.
(j) Includes 27,065 shares of Common Stock reserved for issuance upon exercise
of stock options which are or will become exercisable on or before May 30,
2001.
(k) Includes 47,001 shares of Common Stock reserved for issuance upon exercise
of stock options which are or will become exercisable on or before May 30,
2001.
(l) Includes 121,253 shares of Common Stock reserved for issuance upon exercise
of stock options which are or will become exercisable on or before May 30,
2001.
(m) Includes 107,189 shares of Common Stock reserved for issuance upon exercise
of stock options which are or will become exercisable on or before May 30,
2001.
(n) Includes 2,519,416 shares of Common Stock owned directly and for
which Mr. Kaplan has sole voting power and 229, 000 shares of Common Stock
owned by Kaplan Nathan & Company, LLP a Delaware limited partnership, and
for which Mr. Kaplan shares voting and depositive power. This information
is based on a Scedule13G amendment filed by Mr. Kaplan, Box 385 Leona ,
N.J. 07605, on February 14, 2001.

Page 15

(o) Includes (i) shares owned by Sherry Gold, the spouse of David Gold, (ii)
shares controlled through Au Zone and (iii) shares of Common Stock reserved
for issuance upon exercise of stock options which are or will become
exercisable on or before May 30, 2001.
</FN>

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
- -------------------------------------------------------------------------------

Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers, directors, and persons who own more than ten
percent of a registered class of the Company's equity securities to file reports
of ownership and changes in ownership with the Commission. Executive officers,
directors and greater-than-ten percent shareholders are required by the
Commission's regulations to furnish the Company with all Section 16(a) forms
they file. Based solely on its review of the copies of the forms received by it
and written representations from certain reporting persons that they have
complied with the relevant filing requirements, the Company believes that,
during the year ended December 31, 2000, all the Company's executive officers,
directors and greater-than-ten percent shareholders complied with all Section
16(a) filing requirements., with the exception of the following: each of Jose
Gomez and Helen Pipkin filed late form 4's covering two transactions; Au-Zone
Investments filed one late Form 4 covering three transactions; Andy Farina filed
one late Form 4 covering one transaction and each of the Schiffer's and Jeff and
Howard Gold filed one late Form 4 covering seven transactions and Sherry and
David Gold filed two late Form 4's covering eight transactions.

SHAREHOLDER PROPOSALS

Any shareholder who intends to present a proposal at the next Annual
Meeting for inclusion in the Company's Proxy Statement and Proxy relating to
such Annual Meeting must submit such proposal to the Company at its principal
executive offices by December 13, 2001.

INDEPENDENT PUBLIC ACCOUNTANTS

Arthur Andersen LLP, independent public accountants, were selected by
the Board of Directors to serve as independent public accountants of the Company
for the year ended December 31, 2000 and have been selected by the Board of
Directors to serve as independent public accountants for the fiscal year ending
December 31, 2001. Representatives of Arthur Andersen LLP are expected to be
present at the Annual Meeting, will be afforded the opportunity to make a
statement if they desire to do so, and will be available to respond to
appropriate questions from shareholders.

During the fiscal year ended December 31, 2000, the Company retained
its principal auditor, Arthur Andersen LLP, to provide services in the following
categories and amounts.

1. Audit fees $346,000
2. Financial Information System
Design and Implementation
Fees $ -
3. Other services $143,000

The Audit Committee has considered whether the provision of non-audit services
by the Company's principal auditor is compatible with maintaining auditor
independence.

SOLICITATION OF PROXIES

The expenses of preparing, assembling, printing and mailing this Proxy
Statement and the materials used in the solicitation of Proxies will be borne by
the Company. It is contemplated that the Proxies will be solicited through the
mails, but officers, directors and regular employees of the Company may solicit
Proxies personally. Although there is no formal agreement to do so, the Company
may reimburse banks, brokerage houses and other custodians, nominees and
fiduciaries for their reasonable expenses in forwarding the Proxy materials to
shareholders whose stock in the Company is held of record by such entities. In
addition, the Company may use the services of individuals or companies it does
not regularly employ in connection with the solicitation of Proxies if
management determines it advisable.

Page 16

ANNUAL REPORT ON FORM 10-K

THE COMPANY'S ANNUAL REPORT ON FORM 10-K, WHICH HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION FOR THE YEAR ENDED DECEMBER 31, 2000, WILL BE
MADE AVAILABLE TO SHAREHOLDERS WITHOUT CHARGE UPON WRITTEN REQUEST TO 99 CENTS
ONLY STORES, 4000 UNION PACIFIC AVENUE, CITY OF COMMERCE, CALIFORNIA 90023,
ATTENTION: CHIEF FINANCIAL OFFICER.

ON BEHALF OF THE BOARD OF DIRECTORS

/S/ ERIC SCHIFFER

Eric Schiffer
President
4000 Union Pacific Avenue
City of Commerce, California 90023
April 12, 2001

Page 17

APPENDIX A

CHARTER
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS

I. CONTINUOUS ACTIVITIES - GENERAL

1. Provide an open avenue of communication between the independent auditor
and the Board of Directors.

2. Meet three times per year or more frequently as circumstances require.
The Committee may ask members of management or others to attend meetings and
provide pertinent information as necessary.

3. Confirm and assure the independence of the independent auditor and the
objectivity of the internal auditor.

4. Review with the independent auditor the coordination of audit efforts to
assure completeness of coverage, reduction of redundant efforts, and the
effective use of audit resources.

5. Inquire of management and the independent auditor about significant
risks or exposures and assess the steps management has taken to minimize such
risk to the Company.

6. Consider and review with the independent auditor:

(a) The adequacy of the Company's internal controls including
computerized information system controls and security.

(b)Related findings and recommendations of the independent auditor and
Internal Audit Committee together with management's responses.

7. Consider and review with management and the independent auditor.

(a) Significant findings during the year, including the Status of
Previous Audit Recommendations.

(b) Any difficulties encountered in the course of audit work including
any restrictions on the scope of activities or access to required
information.

(d) The audit budget and staffing.

8. Meet periodically with the independent auditor and management in
separate executive sessions to discuss any matters that the Committee or these
groups believe should be discussed privately with the Audit Committee.

9. Report periodically to the Board of Directors on significant results of
the foregoing activities.

10. Instruct the independent auditor that the Board of Directors, as the
Shareholders' representative, is the auditor's client.

Page 18

II. CONTINUOUS ACTIVITIES-RE: REPORTING SPECIFIC POLICIES

1. Advise financial management and the independent auditor that they are
expected to provide a timely analysis of significant current financial reporting
issues and practices.

2. Provide that financial management and the independent auditor discuss
with the audit committee their qualitative judgments about the appropriateness,
not just the acceptability, of accounting principles and financial disclosure
practices used or proposed to be adopted by the Company and, particularly, about
the degree of aggressiveness or conservatism of its accounting principles and
underlying estimates.

3. Inquire as to the auditor's independent qualitative judgments about the
appropriateness, not just the acceptability, of the accounting principles and
the clarity of the financial disclosure practices used or proposed to be adopted
by the Company.

4. Inquire as to the auditor's views about whether management's choices of
accounting principles are conservative, moderate, or aggressive from the
perspective of income, asset and liability recognition, and whether those
principles are common practices or are minority practices.

5. Determine, as regards new transactions or events, the auditor's
reasoning for the appropriateness of the accounting principles and disclosure
practices adopted by management.

6. Assure that the auditor's reasoning is described in determining the
appropriateness of changes in accounting principles and disclosure practices.

7. Inquire as to the auditor's views about how the Company's choices of
accounting principles and disclosure practices may affect analysts and public
views and attitudes about the Company.

III. SCHEDULED ACTIVITIES

1. Recommend the selection of the independent auditor for approval by the
Board of Directors, approve the fees estimates of the independent auditor, and
review and approve the discharge of the independent auditor.

2. Consider, in consultation with the independent auditor, the audit scope
and plan of the independent audit.

3. Review with management and the independent auditor the results of annual
audits and related comments in consultation with the Board and other committees
as deemed appropriate including:

(a) The independent auditor's audit of the Company's and annual
financial statements, accompanying footnotes and its report thereon.

(b) Any significant changes required in the independent auditor's
audit plans.

(d)Other matters related to the conduct of the audit which are to be
communicated to thc Audit Committee under Generally Accepted Auditing
Standards.

4. Describe in the Company's Annual Report the Committee's composition and
responsibilities, and how they were discharged.

5. Arrange for the independent auditor to be available to the full Board of
Directors annually to help as a basis for the board to approve the appointment
of the auditor. Update the Committee's Charter annually.

Page 19

IV. "WHEN NECESSARY" ACTIVITIES

1. Review and approve requests for any management consulting engagement to
be performed by the Company's independent auditor and be advised of any other
study undertaken at the request of management that is beyond the scope of the
audit engagement letter.

2.Review periodically with general counsel legal and regulatory matters
that may have a material impact on the Company's financial statements,
compliance policies and programs.

3. Conduct or authorize investigations into any matters within the
Committee's scope of responsibilities. The Committees shall be empowered to
retain independent counsel and other professionals to assist in the conduct of
any investigation.