Form 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                                Washington, D. C.
                                      20549

(Mark One)
[X]        QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
           OF THE SECURITIES EXCHANGE ACT OF 1934

           For  the  quarterly  period  ended  August  29,  1998

  OR  

[ ]        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
           OF THE SECURITIES EXCHANGE ACT OF 1934

          For the transition period from _____________ to ____________

                           Commission File No. 0-5815

                            AMERICAN CONSUMERS, INC.
             (Exact name of registrant as specified in its charter)

            GEORGIA                                     58-1033765    
(State or other jurisdiction of             (I.R.S. Employer Identification
incorporation or organization)                             Number)

P.O. Box 2328, 418A Battlefield Pkwy., Fort Oglethorpe, GA           30742
(Address of principal executive offices)                           (Zip Code)

       Registrant's Telephone Number, including Area Code: (706) 861-3347

                                       N/A
              (Former name, former address and former fiscal year,
                          if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities 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 past 90 days. YES (X) NO ( )

                      APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

               Class                              Outstanding at October 8, 1998
COMMON STOCK  -  $.10 PAR VALUE                              888,863
NON VOTING COMMON STOCK  -  $.00 PAR VALUE                      0
NON VOTING PREFERRED STOCK - $.00 PAR VALUE                     0

                                                     Exhibit Index on Page 10

                                      (1)

<PAGE>


                              FINANCIAL INFORMATION
                            AMERICAN CONSUMERS, INC.
              CONSDENSED STATEMENTS OF INCOME AND RETAINED EARNINGS

                                                       THIRTEEN WEEKS ENDED
                                                    August 29,       August 30,
                                                       1998             1997
                                                   -----------      -----------

NET SALES                                          $ 6,639,544      $ 6,877,871
COST OF GOODS SOLD                                   5,250,300        5,389,213
                                                   -----------      -----------

Gross Margin                                         1,389,244        1,488,658
OPERATING EXPENSES                                   1,455,250        1,455,123
                                                   -----------      -----------

Operating Income (Loss)                                (66,006)          33,535

OTHER INCOME (EXPENSE)
  Interest income                                        7,671            6,851
  Other income                                          13,937           13,403
  Interest expense                                     (12,759)         (15,345)
                                                   -----------      -----------

Income (Loss) Before Income Taxes                      (57,157)          38,444

PROVISION (BENEFIT) FOR INCOME TAXES                   (24,506)          11,095
                                                   -----------      -----------

NET INCOME (LOSS)                                      (32,651)          27,349

RETAINED EARNINGS:
  Beginning                                          1,803,098        1,719,552
                                                   -----------      -----------

  Ending                                             1,770,447        1,746,901
                                                   ===========      ===========

PER SHARE:
  Net income (loss)                                ($    0.037)     $     0.030
                                                   ===========      ===========

  Cash dividends                                   $     0.000      $     0.000
                                                   ===========      ===========

WEIGHTED AVERAGE NUMBER OF
  SHARES OUTSTANDING                                   890,597          921,507
                                                   ===========      ===========




                        See Notes to Financial Statements

                                      (2)

<PAGE>

                              FINANCIAL INFORMATION
                            AMERICAN CONSUMERS, INC.
                            CONDENSED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                August 29,     May 30,
                                                                   1998         1998    
                                                                ----------   ----------
                                 --A S S E T S--
<S>                                                             <C>          <C>       
CURRENT ASSETS:
  Cash and short-term investments                               $  936,033   $  945,222
  Certificate of deposit                                           394,792      394,792
  Accounts receivable                                              182,608      175,135
  Inventories                                                    1,789,361    1,830,003
  Prepaid expenses                                                  18,732       14,613
  Refundable income tax                                             22,500            0
                                                                ----------   ----------
     Total current assets                                        3,344,026    3,359,765
                                                                ==========   ==========

PROPERTY - At cost:
  Property                                                       2,942,742    2,939,838
  Less accumulated depreciation                                  2,113,412    2,046,381
                                                                ----------   ----------
    Property - Net                                                 829,330      893,457
                                                                ----------   ----------
OTHER ASSETS                                                         4,000        4,000
                                                                ----------   ----------
TOTAL ASSETS                                                    $4,177,356   $4,257,222
                                                                ==========   ==========

                   -- LIABILITIES AND STOCKHOLDERS' EQUITY --

CURRENT LIABILITIES:
  Accounts payable                                              $  701,830   $  655,937
  Short-term borrowings                                            198,169      208,945
  Obligations under capital leases, current portion                133,833      144,077
  Accrued sales tax                                                 71,560      106,239
  Accrued income taxes                                               5,122       24,634
  Other accrued liabilities                                        144,618      128,652
                                                                ----------   ----------
     Total Current Liabilities                                   1,255,132    1,268,484
                                                                ----------   ----------
DEFERRED INCOME TAX LIABILITY                                       61,504       62,504
                                                                ----------   ----------
DEFERRED INCOME                                                    102,248      107,546
                                                                ----------   ----------
OBLIGATIONS UNDER CAPITALIZED LEASE AGREEMENTS                     156,277      183,842
                                                                ----------   ----------
COMMITMENTS AND CONTINGENCIES (Note 2)
STOCKHOLDERS' EQUITY:
  Non voting preferred stock; authorized 5,000,000
     shares of no par value; no shares issued                           --           --
  Non voting common stock; authorized 5,000,000
     shares of $.10 par value; no shares issued                         --           --
  Common stock; authorized 5,000,000 shares
     of $.10 par value; issued 890,597                              89,060       89,060
  Additional paid-in capital                                       742,688      742,688
  Retained earnings                                              1,770,447    1,803,098
                                                                ----------   ----------
     Total Stockholders' Equity                                  2,602,195    2,634,846
                                                                ----------   ----------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY                         4,177,356    4,257,222
                                                                ==========   ==========
</TABLE>

                        See Notes to Financial Statements

                                      (3)

<PAGE>

                              FINANCIAL INFORMATION
                             AMERICAN CONSUMER, INC.
                       CONSENSED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                            THIRTEEN WEEKS ENDED
                                                           ----------------------
                                                           August 29,   August 30,
                                                              1998         1997
                                                           ---------    ---------
<S>                                                        <C>          <C>      
CASH FLOWS FROM OPERATING ACTIVITIES
Net income                                                 ($ 32,651)   $  27,349
Adjustments to reconcile net income to net cash
   provided by (used in) operating activities:
     Depreciation and amortization                            67,032       70,172
     Deferred income taxes                                    (1,000)      (2,000)
     Deferred income                                          (5,299)      (5,299)
     Change in operating assets and liabilities:
       Accounts receivable                                    (7,473)    (147,150)
       Inventories                                            40,642        5,006
       Prepaid expenses                                       (4,119)       2,324
       Refundable income taxes                               (22,500)      13,100
       Accounts payable                                       45,893      148,379
       Accrued sales tax                                     (34,679)      12,421
       Accrued income taxes                                  (19,512)          --
       Other accrued liabilities                              15,966        4,127
                                                           ---------    ---------
Net Cash provided by (used in) operating activities           42,300      128,429
                                                           ---------    ---------

CASH FLOWS FROM INVESTING ACTIVITIES
  Purchase of property                                        (2,904)      (3,836)
     Net cash used in investing activities                    (2,904)      (3,836)
                                                           ---------    ---------

CASH FLOWS FROM FINANCING ACTIVITIES
  Net increase (decrease) in short-term borrowings           (10,776)       2,000
  Principal payments on obligations under capital leases     (37,809)     (34,380)
                                                           ---------    ---------
     Net cash used in financing activities                   (48,585)     (32,380)
                                                           ---------    ---------
Net increase (decrease) in cash                               (9,189)      92,213
Cash and cash equivalents at beginning of period             945,222      860,472
                                                           ---------    ---------
Cash and cash equivalents at end of period                   936,033      952,685
                                                           =========    =========

SUPPLEMENTAL  DISCLOSURE  OF CASH FLOW  INFORMATION
  Cash paid during the period for:
     Income taxes                                          $  19,512    $     994
                                                           =========    =========
     Interest                                              $  12,759    $  15,344
                                                           =========    =========
</TABLE>


                        See Notes to Financial Statements

                                      (4)

<PAGE>

                            AMERICAN CONSUMERS, INC.
                          NOTES TO FINANCIAL STATEMENTS

(1)  Basis of Presentation.

     The financial  statements  have been prepared in conformity  with generally
     accepted accounting principles and general practices within the industry.

     The interim  financial  statements  should be read in conjunction  with the
     notes to the  financial  statements  presented  in the  Corporation's  1998
     Annual Report to Shareholders.  The quarterly financial  statements reflect
     all  adjustments  which are, in the opinion of management,  necessary for a
     fair  presentation  of the  results for  interim  periods.  The results for
     interim  periods are not  necessarily  indicative of results to be expected
     for the complete fiscal year.

(2)  Commitments and Contingencies.

     Capital expenditures are not expected to exceed $100,000 during the current
     fiscal year. This figure could increase if Y2K problems arise.

     The Company adopted a retirement  plan effective  January 1, 1995. The plan
     is  a  401(k)  plan   administered   by  BISYS   Qualified  Plan  Services.
     Participation in the plan is available to all full-time employees after one
     year of service and age 19. Any  contribution by the Company will be at the
     discretion of the Board of Directors. The Board voted to contribute $10,000
     to the plan in 1998 and $15,000 in 1997.

     None of the Company's employees are represented by a union.

     Subsequent to August 29, 1998, the Company  exercised  existing  options to
     extend the leases for its administrative  office (extended through November
     30,  1999)  and for its  retail  store in  Chickamauga,  Georgia  (extended
     through December 31, 2004).

(3)  The Company invests excess funds in the U.S. Government for U.S. Government
     Agency securities which are purchased under an agreement to resell (reverse
     re- purchase  agreement).  The  securities are purchased from a bank but do
     not constitute  deposits at the bank and not insured by the Federal Deposit
     Insurance Corporation. The bank maintains possession of the securities, but
     title of  ownership  passes to the  Company  according  to the terms of the
     agreement. The bank repurchases the securities the business day immediately
     following the Company's  purchase date.  The carrying  amount of securities
     purchased under agreement to resell approximates fair value. Risk of market
     value   deterioration  is  mitigated  by  the  short-term   nature  of  the
     transaction and the type of securities purchased. Amounts outstanding under
     the  agreement  were  $97,520 at August 29,  1998,  and $161,256 at May 30,
     1998.

                                      (5)

<PAGE>

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS
                              RESULTS OF OPERATIONS

                                                        THIRTEEN WEEKS ENDED
                                                    ----------------------------
                                                     August 29,       August 30,
                                                        1998            1997
                                                    -----------      -----------
Sales                                               $ 6,639,544      $ 6,877,871
% Sales Increase (Decrease)                               -3.47            -5.13
Gross Margin %                                            20.92            21.64
Operating and Administrative Expense:
  Amount                                            $ 1,455,251      $ 1,455,123
  % of Sales                                              21.92            21.16
Net Income (Loss)                                   ($   32,651)     $    27,349

     The  decrease in sales of 3.47%  includes  losses at four of the  Company's
locations.  Competition  has increased  pressure on the Company's  market share,
sales and profits, the effects of which are threatening the profitability of the
Company.  The Company's  competitors are constantly  conducting sales promotions
which  are  expensive  for an  operation  the  size  of the  Company  to  match.
Management  believes that competitive  pressures on the Company will continue to
increase over time as a result of its competitors opening more new stores in the
Company's trade area.  Management is  continuously  seeking to improve the gross
margin and increase profitability by obtaining the lowest cost for the Company's
inventory. Subsequent to the end of the most recent quarter, the retail price of
soft drinks has been adjusted in an effort to improve the gross margin.

     Operating  expenses  increased  from 20.16% of sales to 21.92% of sales due
primarily to the  reduction in sales.  The dollar value of the increase was only
$128.

     Interest  expense  decreased  because of the  reduction in the  capitalized
lease obligation of the Company.

     Accounts  payable  increased  from  $655,937 to  $701,830 or $45,893.  This
increase is normal at the end of August.  Last year accounts  payable  increased
$148,379 between year end and August 30, 1997.

     The benefit  for income  taxes for the  quarter  ended  August 29, 1998 was
$24,506 as compared to a provision  for income taxes in the amount of $11,095 at
August  30,  1997.  The  provision  (benefit)  for  income  taxes  does not vary
significantly from the statutory rate of 34%.

Inflation:

     Although not a current  significant  factor,  the Company continues to seek
ways to cope with the threat of renewed  inflation.  To the extent  permitted by
competition,  increased  costs of goods and services are  reflected in increased
selling prices for the goods sold by the Company.


                                      (6)

<PAGE>

                               FINANCIAL CONDITION

Liquidity and Capital Resources:

     The Company finances its working capital  requirements  principally through
its cash flow from operations and short-term borrowing.  Short-term borrowing to
finance inventory purchases is provided by the Company's $800,000 line of credit
with a regional bank. An additional  line of credit in the amount of $300,000 is
also  available  from its  principal  inventory  supplier.  Long-term  borrowing
generally finances capital expansion.

     Short-term  borrowings as of August 29, 1998 and August 30, 1997 consist of
unsecured notes payable to a trust for the benefit of a son of Michael and Diana
Richardson, principal shareholders of the Company, and to the estate of a former
principal  stockholder.  The  notes,  in the  amount of  $198,169  and  $208,945
respectively,  are  payable on demand and bear  interest  at .25% below the base
rate  charged by the regional  bank which  provides the Company with its line of
credit to finance inventory purchases.

     The ratio of current assets to current liabilities was 2.66 to 1 at the end
of the latest  quarter,  August 29, 1998, as compared to 2.47 to 1 on August 30,
1997 and 2.65 to 1 at the end of the fiscal  year ended May 30,  1998.  Cash and
cash  equivalents  constituted  39.80% of the total current assets at August 29,
1998 as compared to 27.69% at August 30,  1997 and 39.88% at May 30,  1998.  The
activity is detailed in the Condensed Statements of Cash Flows on page four.

     During the quarter ended August 29, 1998 retained  earnings  decreased as a
result of the Company's net loss for the quarter.

                                      (7)

<PAGE>

                            AMERICAN CONSUMERS, INC.


                            PART II OTHER INFORMATION

     Item 4    Submission of Matters to a Vote of Security Holders.

     The Company held its Annual Meeting of  Shareholders on September 17, 1998,
at which  shareholders  were asked to vote on the election of directors  for the
fiscal year ending in 1999.  Proxies were  solicited by  management  in favor of
seven nominees, with no solicitation in opposition to management's nominees. All
of such nominees were elected,  with the number of votes cast for,  against,  or
withheld  as well as the number of broker non votes and  abstentions  as to each
nominee having been as follows:

<TABLE>
<CAPTION>
                                               TOTAL              VOTES               VOTES                               BROKER
                                              SHARES              CAST                CAST           VOTES                 NON
        NOMINEE                                VOTED               FOR               AGAINST        WITHHELD              VOTES
        -------                              ---------          ---------            -------        ---------            -------
<S>                                          <C>                <C>                    <C>          <C>                  <C>    
Michael A. Richardson                        630,703.6          630,389.6              314.0        259,893.4            4,904.0
Paul R. Cook                                 630,703.6          630,389.6              314.0        259,893.4            4,904.0
Virgil E. Bishop                             630,703.6          630,389.6              314.0        259,893.4            4,904.0
John P. Price                                630,703.6          629,949.6              754.0        259,893.4            4,904.0
Thomas L. Richardson                         630,703.6          630,389.6              314.0        259,893.4            4,904.0
Jerome P. Sims, Sr                           630,703.6          629,379.8            1,323.8        259,893.4            4,904.0
Andrew V. Douglas                            630,703.6          629,379.8            1,323.8        259,893.4            4,904.0
</TABLE>


     Item 6    EXHIBITS AND REPORTS OF FORM 8-K

               (a)  The following exhibits are filed as a part of the report.

                    (11) Statement re: computation of per share earnings.

                    (27) Financial Data Schedule (EDGAR filing only)


               (b)  During the most recent quarter,  the Company has not filed a
                    report on Form 8-K.

                                      (8)

<PAGE>

                                   SIGNATURES

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.



                                         AMERICAN CONSUMERS, INC.
                                         (Registrant)


                                    /s/ Michael A. Richardson
Date: 10/8/98                   -----------------------------------------------
                                Michael A. Richardson
                                CHAIRMAN
                                (Principal Executive Officer)


                                    /s/ Paul R. Cook
Date: 10/8/98                   -----------------------------------------------
                                Paul R. Cook
                                EXECUTIVE VICE PRESIDENT - TREASURER
                                (Principal Financial Officer & Chief Accounting
                                Officer)



                                      (9)