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CORRESP
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December 10, 2004

VIA EDGAR

Mr. Michael Moran

Branch Chief

Securities and Exchange
Commission

450 Fifth Street, NW

Washington, D.C. 20549

  RE:

  Family Dollar Stores,
  Inc.

  Form 10-K for the year
  ended August 28, 2004

  File No. 1-6807

Dear Mr. Moran:

Set forth below are the
responses of Family Dollar Stores, Inc. (the “Company”) to the comment letter
of the staff of the United States Securities and Exchange Commission dated
November 22, 2004 (the “Comment Letter”) regarding the Company’s Form 10-K for
the year ended August 28, 2004 (File No. 1-6807).

Form 10-K for the year
ended August 28, 2004

Item 7. Management’s
Discussion and Analysis of Financial Condition and Results of Operations

Net Sales, page 12

1.               You disclose that
net sales increased $532 million, or 11.2% during fiscal 2004.  In future filings, please also disclose in
dollars the sales of your new stores in fiscal 2004 and the incremental effect
of having stores opened in 2003 being open all of 2004, so that readers better
understand the portion of the overall change in your retail sales from period
to period that relates to these business reasons.  Similarly, please revise your discussion for
other periods as well.

COMPANY RESPONSE:

For the periods for which
sales comparisons are presented, the Company will provide the total dollar
sales increase in existing stores sales in future filings and will state that
the remaining portion of the sales increase relates to stores that have been
open 13 months or less, and will also state, if applicable, that this portion
of the sales increase may be slightly offset by stores that were closed during
the period.

Selling, General and
Administrative Expenses, page 19

2.               You disclose that
selling, general and administrative expenses increased $157 million during
fiscal 2004.  Further, we note from your
disclosures in Note 4 relating to accrued liabilities that self-

insurance reserves
increased approximately $35 million, or 39% during fiscal 2004, and these
reserves increased 41% during fiscal 2003.
Supplementally please tell us and disclose in MD&A in future filings
a more comprehensive reason for significant increases in your reserve for
self-insurance liabilities.  Please
provide us support for the major components of the total self-insurance reserves
for the periods presented.

COMPANY RESPONSE:

The major components of
the self insurance liability are accrued amounts for workers’ compensation and
general liability claims with the amount for workers’ compensation being the
largest component.  As referenced in the
disclosure for Selling, General and Administrative Expenses, growth in these
claims has been significant due to the reasons mentioned in this
disclosure.  Because the nature of these
claims is such that there can be a significant lag from the incurrence of the
claim (which is when the expense is accrued) until payment is made, the
percentage increase in the accrual can be much more pronounced than the
percentage increase in the expense.  The
Company will include explanatory language of this effect in the Insurance
Liabilities section of its Critical Accounting Policies in future filings.

Item 15. Exhibits,
Financial Statement Schedules and Reports on Form 8-K

(a) Documents
filed as part of this report, page 37

3.               We note that you do
not include Schedule II-Valuation and Qualifying Accounts and Reserves as
required by Rules 5-04 (c) and 12-09 of Regulation S-X.  Please tell us and disclose in future filings
Schedule II to include the amounts of all reserves recorded for all periods
presented.

COMPANY RESPONSE:

The Company has reviewed
Rules 5-04 (c) and 12-09 of Regulation S-X and believes that it has complied
with those requirements.  The Company
does not have a material allowance for doubtful accounts, deferred tax asset
valuation reserve or LIFO reserve, the types of accounts that we believe are
required to be disclosed pursuant to the Regulation.  Upon review, we believe that the self
insurance reserve for workers’ compensation and general liability claims
disclosed in Note 4 may be more appropriately described as self insurance
liabilities, and we will adopt this description in future filings.

Exhibits filed herewith,
page 41

Exhibits 31.1 and 31.2

4.               In future filings,
please delete the title of each officer from the first sentence of each
certification that you file.  The
certification should be in the exact format provided by Item 601 (b)(31) of
Regulation S-K.  Please also confirm that
the inclusion of your CEO’s and CFO’s title of your principal executive officer
and your principal financial officer in the first line of each certification
was not intended to limit the capacity in which such individuals provided the
certifications in your Form 10-K for the year ended August 28, 2004.

COMPANY RESPONSE:

The Company will delete
the title of each officer in the first sentence of each certification in future
filings.  The inclusion of the titles of
the CEO, the principal executive officer, and CFO, the principal financial
officer, was not intended to limit the capacity in which such individuals
provided the certifications in the Form 10-K for the year ended August 28,
2004.

If
you have any questions, or if I can be of any further assistance, please do not
hesitate to contact me directly at (704)- 814-3284.

Sincerely,

  /s/
  C. Martin Sowers

  C.
  MARTIN SOWERS

  Senior
  Vice President-Finance