UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                            Washington, D. C.  20549

                                   FORM 10-Q
(Mark One)
[X]          QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
             OF THE SECURITIES EXCHANGE ACT OF 1934

             For the quarterly period ended December 2, 2006
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)

               55 Hannah Way, Rossville, GA                30741
               -------------------------------------------------
            (Address of principal executive offices)     (Zip Code)

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

Indicate  by  check mark whether the registrant is a large accelerated filer, an
accelerated  filer,  or  a non-accelerated filer. See definition of "accelerated
filer  and  large  accelerated  filer" in Rule 12b-2 of the Exchange Act. (Check
one):

Large accelerated filer ( )   Accelerated filer ( )   Non-accelerated filer (X)

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).  ( ) 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 January 4, 2007
COMMON STOCK - $ .10 PAR VALUE                             787,851
NON VOTING COMMON STOCK - $ .10 PAR VALUE                    ----


<PAGE>
<TABLE>
<CAPTION>
ITEM 1.   FINANCIAL STATEMENTS
                                      FINANCIAL INFORMATION
                                     AMERICAN CONSUMERS, INC.
                       CONDENSED STATEMENTS OF INCOME AND RETAINED EARNINGS
                                           (UNAUDITED)


                                         THIRTEEN WEEKS ENDED         TWENTY-SIX WEEKS ENDED
                                    -----------------------------  ------------------------------
                                     December 2,    November 26,    December, 2,    November 26,
                                        2006            2005            2006            2005
                                    -------------  --------------  --------------  --------------
<S>                                 <C>            <C>             <C>             <C>
NET SALES                           $  8,392,267   $   8,047,771   $  16,782,978   $  16,042,860
COST OF GOODS SOLD                     6,417,697       6,098,898      12,795,391      12,139,073
                                    -------------  --------------  --------------  --------------
Gross Margin                           1,974,570       1,948,873       3,987,587       3,903,787
OPERATING, GENERAL AND
ADMINISTRATIVE EXPENSES                1,995,765       1,998,887       4,003,560       3,968,676
                                    -------------  --------------  --------------  --------------

Operating (Loss)                         (21,195)        (50,014)        (15,973)        (64,889)

OTHER INCOME (EXPENSE)
  Interest income                          4,030           2,676           7,658           5,276
  Other income                            35,032          28,347          61,382          49,923
  Interest expense                       (14,636)        (14,251)        (29,489)        (27,453)
                                    -------------  --------------  --------------  --------------
Income (Loss) Before Income Taxes          3,231         (33,242)         23,578         (37,143)
INCOME TAXES                                  --              --              --              --
                                    -------------  --------------  --------------  --------------

NET INCOME (LOSS)                          3,231         (33,242)         23,578         (37,143)

RETAINED EARNINGS:
  Beginning                              795,903         939,561         775,615         943,462

  Redemption of common stock                (454)           (243)           (513)           (243)
                                    -------------  --------------  --------------  --------------

  Ending                            $    798,680   $     906,076   $     798,680   $     906,076
                                    =============  ==============  ==============  ==============

PER SHARE:
  Net Income (loss)                 $      0.004   $      (0.042)  $       0.030   $      (0.046)
                                    =============  ==============  ==============  ==============

  Cash dividends                    $         --   $          --   $          --   $          --
                                    =============  ==============  ==============  ==============

WEIGHTED AVERAGE NUMBER
  OF SHARES OUTSTANDING                  790,191         801,008         794,076         802,851
                                    =============  ==============  ==============  ==============

                               See Notes to Financial Statements
</TABLE>


                                        2
<PAGE>
<TABLE>
<CAPTION>
                                   FINANCIAL INFORMATION
                                  AMERICAN CONSUMERS, INC.
                                  CONDENSED BALANCE SHEETS


                                                                 December 2,     June 3,
                                                                    2006           2006
                                                                -------------  ------------
                                                                 (Unaudited)
<S>                                                             <C>            <C>
                                     --A S S E T S--
CURRENT ASSETS
  Cash and short-term investments                               $    282,105   $   334,654
  Certificate of deposit                                             304,034       314,773
  Accounts receivable                                                215,913       170,316
  Inventories                                                      2,193,249     2,124,431
  Prepaid expenses                                                   186,890       123,545
                                                                -------------  ------------
Total current assets                                               3,182,191     3,067,719
                                                                -------------  ------------
PROPERTY AND EQUIPMENT - at cost
  Leasehold improvements                                             300,800       295,057
  Furniture, fixtures and equipment                                3,303,349     3,300,542
                                                                -------------  ------------
                                                                   3,604,149     3,595,599
  Less accumulated depreciation                                   (3,225,375)   (3,151,622)
                                                                -------------  ------------
                                                                     378,774       443,977
                                                                -------------  ------------
TOTAL ASSETS                                                    $  3,560,965   $ 3,511,696
                                                                =============  ============

                         --LIABILITIES AND STOCKHOLDERS' EQUITY--
CURRENT LIABILITIES
  Accounts payable                                              $    957,711   $   867,663
  Short-term borrowings                                              513,721       527,131
  Current maturities of long-term debt                                74,712        78,120
  Accrued sales tax                                                  134,048       156,442
  Other                                                              238,204       217,981
                                                                -------------  ------------
Total current liabilities                                          1,918,396     1,847,337
                                                                -------------  ------------
LONG-TERM DEBT                                                       106,898       144,497
                                                                -------------  ------------

STOCKHOLDERS' EQUITY
  Nonvoting preferred stock - authorized 5,000,000
    shares of no par value; no shares issued                              --            --
  Nonvoting common stock - authorized 5,000,000
    shares-$.10 par value; no shares issued                               --            --
  Common stock - $.10 par value; authorized 5,000,000
    shares; shares issued of 789,136 and 796,906 respectively         78,914        79,691
  Additional paid-in capital                                         658,077       664,556
  Retained earnings                                                  798,680       775,615
                                                                -------------  ------------
Total Stockholders' Equity                                         1,535,671     1,519,862
                                                                -------------  ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                      $  3,560,965   $ 3,511,696
                                                                =============  ============

                            See Notes to Financial Statements
</TABLE>


                                        3
<PAGE>
<TABLE>
<CAPTION>
                                 FINANCIAL INFORMATION
                               AMERICAN CONSUMERS, INC.
                          CONDENSED STATEMENTS OF CASH FLOWS
                                      (UNAUDITED)


                                                             TWENTY-SIX WEEKS ENDED
                                                         -----------------------------
                                                          December 2,    November 26,
                                                             2006            2005
                                                         -------------  --------------
<S>                                                      <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (loss)                                        $     23,578   $     (37,143)
Adjustments to reconcile net income (loss) to net cash
  provided by operating activities:
    Depreciation and amortization                              75,743         141,276
    Change in operating assets and liabilities:
      Accounts receivable                                     (45,597)        (50,221)
      Inventories                                             (68,818)         (3,064)
      Prepaid expenses                                        (63,345)        (60,324)
      Accounts payable                                         90,048          34,248
      Accrued sales tax                                       (22,394)        (12,071)
      Other accrued liabilities                                20,223          11,705
                                                         -------------  --------------

Net cash provided by operating activities                       9,438          24,406
                                                         -------------  --------------

CASH FLOWS FROM INVESTING ACTIVITIES
  Decrease (Increase) in certificate of deposit                10,739          (3,827)
  Purchase of property and equipment                          (10,540)        (53,728)
                                                         -------------  --------------
Net cash provided by (used in) investing activities               199         (57,555)
                                                         -------------  --------------

CASH FLOWS FROM FINANCING ACTIVITIES
  Net increase (decrease) in short-term borrowings            (13,410)         98,125
  Proceeds from long-term borrowings                               --          22,212
  Principal payments on long-term debt                        (41,007)       (117,997)
  Redemption of common stock                                   (7,769)         (3,685)
                                                         -------------  --------------
Net cash used in financing activities                         (62,186)         (1,345)
                                                         -------------  --------------

Net decrease in cash                                          (52,549)        (34,494)
Cash and cash equivalents at beginning of period              334,654         298,759
                                                         -------------  --------------
Cash and cash equivalents at end of period               $    282,105   $     264,265
                                                         =============  ==============

                            See Notes to Financial Statements
</TABLE>


                                        4
<PAGE>
                            AMERICAN CONSUMERS, INC.
                          NOTES TO FINANCIAL STATEMENTS

(1)  Basis of  Presentation.

     The  financial  statements  have  been  prepared  in conformity with United
     States  generally  accepted  accounting  principles.

     The  interim  financial  statements  have  not  been  audited and should be
     read in conjunction with the notes to the financial statements presented in
     the  Corporation's  2006  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. All such adjustments are of a normal recurring nature. The results
     for the interim periods are not necessarily indicative of the results to be
     expected  for  the  complete  fiscal  year.

(2)  Commitments  and  Contingencies.

     Capital  expenditures  for  equipment  replacements  in the ordinary course
     during  fiscal 2007 are estimated to be $30,000 or less, which we expect to
     be  funded  from  operating  cash flows. Additionally, we expect to have to
     replace  anywhere  from  one  to  three  vehicles  during fiscal 2007 at an
     estimated  cost  of  approximately  $25,000 per vehicle, which we expect to
     fund  through  either bank or manufacturer financing, whichever option will
     provide  the  Company  with  the  most  favorable  terms.  Finally,  while
     management  is  attempting to postpone future upgrades of our existing cash
     registers  and  scanning equipment beyond fiscal 2007, pending changes that
     will  add  an  additional digit to bar codes on the inventory that we carry
     will  likely require such upgrades within the next two to five fiscal years
     and,  additionally, some of this equipment is subject to being replaced due
     to  availability of parts and wear. We cannot reliably estimate the cost of
     any  such  upgrades  at the present time, but we will attempt to manage the
     number of units purchased and the timing of such purchases in a manner that
     both  contains  the  Company's overall costs and allows us to finance these
     purchases  on  the  most  favorable terms that we are able to obtain. As of
     December  2, 2006, capital expenditures for the fiscal year to date totaled
     $10,540.

     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 is at the
     discretion  of the Board of Directors, which makes its decision annually at
     the  quarterly  meeting in January. The Board voted to contribute $7,500 to
     the  plan  for  both  calendar  years  2006  and  2005.

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

(3)  Cost of  Goods  Sold.

     Cost  of  goods  sold  is  comprised  of  the  cost  of  purchasing  the
     Company's  products  (such as groceries and other vendor-supplied products)
     sold  during  the  period.  Cost  of  goods  sold is equal to the beginning
     inventory,  plus  the  cost  of goods purchased during the period, less the
     amount  comprising  ending  inventory.  The cost of goods sold shown on the
     Company's  Statement  of  Income  and Retained Earnings is presented net of
     rebates from suppliers. These rebates represent cash consideration received
     from  suppliers  based  primarily on the Company's volume of purchases from
     such  suppliers.  These  rebates  do  not  include  reimbursement  of costs
     incurred  to  sell  the supplier's products. In accordance with EITF 02-16,
     the  Company  applies  rebates  from  suppliers  (excluding  rebates  for
     advertising  costs)  as  a  reduction  in  cost  of  goods  sold.


                                        5
<PAGE>
ITEM 2

<TABLE>
<CAPTION>
                              MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                                     CONDITION AND RESULTS OF OPERATIONS

                                            RESULTS OF OPERATIONS

                                                     THIRTEEN WEEKS ENDED          TWENTY-SIX WEEKS ENDED
                                                 -----------------------------  -----------------------------
                                                  December 2,    November 26,    December 2,    November 26,
                                                     2006            2005           2006            2005
                                                 -------------  --------------  -------------  --------------
<S>                                              <C>            <C>             <C>            <C>

Sales                                            $  8,392,267   $   8,047,771   $ 16,782,978   $  16,042,860
% Sales Increase (Decrease)                              4.28%         (1.65)%          4.61%         (1.02)%
Gross Margin %                                          23.53%          24.22%         23.76%          24.33%
Operating, General and Administrative Expense:
  Amount                                         $  1,995,765   $   1,998,887   $  4,003,560   $   3,968,676
  % of Sales                                            23.78%          24.84%         23.85%          24.74%
Net Income (Loss)                                $      3,231   $     (33,242)  $     23,578   $     (37,143)
</TABLE>

OVERVIEW:
--------

American  Consumers,  Inc.,  (the  "Company"),  operates  eight (8) self-service
supermarkets  within  a  compact  geographical  area  that  comprises  Northwest
Georgia,  Northeast Alabama and Southeast Tennessee. All of our supermarkets are
operated  under  the  name  "Shop-Rite,"  and  are engaged in the retail sale of
groceries  including  meats, fresh produce, dairy products, frozen foods, bakery
products,  tobacco  products  and  miscellaneous  other  non-food  items.

The  current  thirteen  weeks (quarter) ended December 2, 2006 resulted in a net
income  in  the  amount  of  $3,231.  During this current period sales increased
4.28%  over  the same period last year.  This increase dropped slightly from the
increase  of  4.95% during the first quarter of this fiscal year, resulting in a
year  to  date sales increase of 4.61%.  During the first quarter of this fiscal
year we began a program to introduce low priced vegetables to compete with other
stores  in  our  trade  area  who  offer  this option to their customers.  While
management  believes  that this program was a significant factor contributing to
the  increase  in  sales,  the  increase was also influenced by the closing of a
competitor  located  between two of the Company's stores during the last quarter
of  the  Company's  fiscal  2006.  We also believe that prevailing high gasoline
prices  during  the  first  two  quarters of the current year contributed to the
increase,  as  customers  chose  to  purchase  more  groceries  for  home  meal
preparation  to  reduce  their  spending at restaurants and to patronize grocery
stores  located  closer  to  their  homes.  However,  the  introduction  of  the
lower-priced  vegetables,  as  well  as  periodic  meat  sales  and other weekly
advertised  specials  run  to  stimulate  sales  during the quarter, also led to
declines  in our gross margin to 23.53% and 23.76% for the quarter and six-month
periods,  respectively.  These  represented gross margin reductions of 0.69% and
0.57%  for the quarter and six-month periods.  The gross margins experienced for
the  quarter  and  the first six months of fiscal 2007 also represent respective
reductions  of  0.65% and 0.42% compared to the 24.18% gross margin realized for
fiscal  year  2006.

Sales  decreases  due  to  adverse  competitive  conditions in a majority of the
markets  served  by  the  Company's  grocery  stores  contributed  to the losses
incurred  during  the quarter and six months ended November 26, 2005 as compared
to  the  comparable  periods ended November 27, 2004.  Our flexibility to adjust
retail  prices  in  response to these competitive conditions was hampered by the
need  to  also  recover  a  fuel  surcharge  that was added to grocery purchases
(excluding  meat,  produce  and  certain  other items) by our principal supplier
early  in  the  quarter  ended  November  26,  2005.


                                        6
<PAGE>
Management  actively  monitors  both  the  gross margin and the Company's retail
pricing  structure  in  an  attempt to maximize profitability.  Management began
working  on the Company's gross margin during the quarter ended August 31, 2002,
at which time the gross margin stood at 22.79% for the fiscal year ended June 1,
2002.  While  occasional  improvements  in gross profit have been seen in recent
periods,  such as the 0.29% increase we achieved for fiscal 2006 versus 2005, it
is  difficult  to maintain a trend of consistent improvement in the gross margin
due  to  competitive  conditions which often delay the Company's ability to pass
through  price increases experienced at the wholesale level.  Accordingly, while
management  attempts  to  offset  increases  in  its  cost  (such  as our recent
successes in recovering our principal supplier's wholesale price increase during
2005  and  a  fuel  surcharge added by the supplier during the second quarter of
fiscal  2006), further improvements in the gross margin may not be achievable at
this  time, and further deterioration in the Company's gross margin is possible.
While the increases in sales more than offset the impact on profitability of the
reduced  gross margins experienced for the quarter and six months ended December
2, 2006, the gross margin reductions of over one half of one percent experienced
as  a  result  of  pricing  adjustments  to  increase sales during these periods
provide  further  evidence  of  this  trend.

We  will attempt to maintain stability in the Company's gross margin, or achieve
slight  improvements,  to  the  extent possible.  We will attempt to improve the
gross  margin  by working to obtain the lowest cost for the Company's inventory,
and  as  competition  permits,  by  periodically implementing adjustments in the
Company's  overall  mix  of retail prices.  However, we believe that competitive
pressures  on  the  Company,  which have led to the losses experienced in recent
periods,  will continue to increase over time as a result of competitors opening
more  new  stores  in  the Company's trade area.  These competitors have greater
financial  resources  than  those  of  the  Company,  and  may be able to obtain
preferential  treatment  from  suppliers  in the form of advertising allowances,
lower  prices and other concessions not available to the Company.  These factors
allow our competitors to engage in aggressive pricing and promotional activities
that  the  Company  cannot  match, putting us at a competitive disadvantage.  In
response  to  these  developments,  management will continue seeking to maximize
profitability  by  managing  the Company's pricing structure to produce the most
favorable  balance  between  increases  in sales, which help to offset our fixed
operating  expenses, and the gross margin, which determines the profitability of
the  additional  sales.

Our  gross  margins  may  not  be  directly  comparable  to  those of our larger
competitors,  since  some  of  those  companies  may  include the costs of their
internal  distribution networks in cost of goods sold - thus impacting the gross
margin  -  while  others  reflect  such  costs  elsewhere (such as in operating,
general  and  administrative expenses).  Unlike many of the larger grocery store
chains with which we compete, the Company does not have an internal distribution
network.  Inventory  is  delivered directly to our individual store locations by
our wholesale supplier, which recovers its distribution costs through the markup
that  it  charges  to  the  Company.

Management  has  been  working  to  reduce operating, general and administrative
expenses.  As  indicated by the table above, however, many of these expenses are
relatively  fixed and their absolute dollar level has remained fairly consistent
for  the periods presented (decreasing only 0.16% for the quarter and increasing
only  0.88%  for  the  six  months  ended December 2, 2006 versus the comparable
periods  of  the  prior  year).  This magnifies the effect of both increases and
decreases  in sales on the Company's operating profit or loss, as well as on our
bottom  line results.  For instance, the sales increase of 4.28% experienced for
the  current  quarter  contributed  to  a  reduction  in  operating, general and
administrative  expenses  as a percent of sales of 1.06% but resulted in a 57.6%
swing in the Company's operating profitability (reducing the operating loss from
$50,014  for  the  comparable  quarter  of  last year to $21,195 for the current
quarter).


                                        7
<PAGE>
Together  with  increases in interest income and other income items discussed in
more  detail  below,  this  increase  contributed to a 109.7% improvement in our
overall operating results for the quarter (moving from a net loss of $33,242 for
the  second  quarter  of  last  year  to  net  income  of $3,231 for the current
quarter).  Similarly, the sales increase of 4.61% experienced for the six months
ended  December  2,  2006  contributed  to a reduction in operating, general and
administrative  expenses  as a percent of sales of 0.89% but resulted in a 75.4%
swing in the Company's operating profitability (reducing the operating loss from
$64,889  for  the  comparable  period  of last year to $15,973 for the first six
months  of  fiscal  2007).  Together with increases in interest income and other
income  items  discussed  in  more  detail below, this increase contributed to a
163.5%  improvement in our overall operating results for the first six months of
fiscal  2007  (moving  from  a  net  loss of $37,143 for the first six months of
fiscal  2006  to  net income of $23,578 for the current period).  Of course, the
same principle will apply to any future decreases in sales due to the effects of
ongoing  competition,  meaning  that  such decreases would tend to intensify the
Company's  losses  by a much greater proportion than the resulting increases the
ratio  of  operating,  general  and  administrative  expenses  to  sales.

Interest  expense  remained  fairly consistent between the periods presented, as
reductions  in the Company's outstanding long-term debt helped to offset most of
the  impact  of  rising  interest  rates  on  our  remaining  variable rate debt
balances.  Rising  interest  rates  did  increase  our interest income, however,
which  contributed  to  the  increase  in our overall profitability for both the
second  quarter  and  first  six  months  of  fiscal  2007.

THREE  MONTHS ENDED DECEMBER 2, 2006 COMPARED TO THREE MONTHS ENDED NOVEMBER 26,
--------------------------------------------------------------------------------
2005:
----

Sales:
-----

Sales  for  the  three months ended December 2, 2006 increased $344,496 or 4.28%
compared  to  the  same  quarter  last  year.  Seven of our eight grocery stores
experienced  sales increases for the quarter (ranging from 1.61% to 8.92%).  The
remaining  location,  where  we  had  to  replace certain store-level management
employees  in  connection  with  the  significant theft loss that was discovered
during  our  annual  audit, experienced a sales decline of 1.14%.  This location
also  continues  to  be adversely impacted by the fact that another tenant moved
out of the shopping center where it is located during fiscal 2006, as well as by
generally unfavorable traffic pattern conditions at that location.  Although the
increase  of  4.28%  was  slightly less than the 4.95% sales increase during the
first  quarter  of  fiscal  2007,  we still achieved a healthy sales increase of
4.61%  for the first six months of the current fiscal year.  As discussed above,
we  believe  these  increases  are  attributable  to the lower-priced vegetables
program  introduced  during  the  first  quarter, as well as to the closing of a
competitor  located  between two of the Company's stores and the effects of high
gas  prices  on  consumers'  spending  choices.

The sales decrease of $134,724 or 1.65%, for the quarter ended November 26, 2005
as compared to the second quarter of the prior fiscal year resulted from the net
impact  of  significant sales decreases at three of the Company's grocery stores
(9.52%,  4.49%  and  4.03%,  respectively),  partially  offset  by  significant
increases  at two other stores (8.89% and 3.49%), while sales at the other three
stores  remained  essentially  flat  or  decreased  only  slightly.  Management
attributes fluctuations in sales noted for individual store locations to factors
associated  with local competition within each store's trade area and to certain
geographic  and  traffic  pattern conditions affecting individual stores, rather
than  to  identifiable  factors  affecting  multiple  locations.


                                        8
<PAGE>
Gross Margin:
------------

The  Company's  gross  margin  percentage for the three months ended December 2,
2006  decreased by 0.69% as compared to the three months ended November 26 2005,
from  24.22%  to 23.53%.  This decrease is attributable to the vegetable program
and  the  other  promotional activities discussed above, as well as to increased
wholesale  costs  for  certain  items  (principally  certain  private  label
merchandise)  which  we have not yet succeeded in passing on through adjustments
to  our  retail  prices.

The  Company's  gross  margin percentage for the three months ended November 26,
2005 increased by 0.08% as compared to the three months ended November 27, 2004,
from  24.14%  to  24.22%.  This  was  due  to  management's  adjustments  to the
Company's  overall  pricing  mix,  including  adjustments  made to recapture the
increase  in  our  primary  inventory  supplier's wholesale markup that occurred
during the quarter ended February 26, 2005.  However the 24.22% gross margin for
the  November  quarter  decreased  from  24.45% for the quarter ended August 27,
2005,  due  primarily  to a fuel surcharge added to grocery purchases (excluding
meat,  produce  and  certain other items) by our principal supplier early in the
November  quarter.

Operating, General and Administrative Expenses:
----------------------------------------------

The  Company's  operating,  general  and  administrative  expenses are comprised
mainly  of  personnel  salary and related payroll costs, utilities and telephone
expenses,  rental  payments for leased locations, insurance expense, advertising
and  promotion  expense,  general  and  office  supplies  expense,  repairs  and
maintenance,  depreciation  expense,  bank service charges and credit card fees,
bad  checks  expense, professional fees, and other minor miscellaneous expenses.
In  accordance  with EITF 02-16, advertising rebates received from suppliers are
deducted  from  advertising  expense  within  this  category.

The  following  table  details  the  components  of  operating,  general  and
administrative expenses, both in absolute terms and as a percentage of the total
of  all  such expenses, for the quarters ended December 2, 2006 and November 26,
2005:

<TABLE>
<CAPTION>
                                             Second
                                             Quarter       % of Second    Second Quarter    % of Second
Expense Item                               2007 Amount   Qtr. 2007 Total    2006 Amount    Qtr. 2006 Total
------------                               ------------  ---------------  ---------------  ---------------
<S>                                        <C>           <C>              <C>              <C>

Payroll                                    $    985,019             49.4  $       951,665             47.6
Utilities & telephone expense                   177,844              8.9          173,622              8.7
Rent                                            160,779              8.1          155,776              7.8
Insurance                                       157,849              7.9          165,301              8.3
Advertising & promotion                         121,451              6.1          141,987              7.1
General & office supplies                        86,263              4.3           76,482              3.8
Repairs & maintenance                            89,827              4.5           91,990              4.6
Depreciation                                     37,616              1.9           69,523              3.5
Bank service charges and credit
card fees                                        42,359              2.1           38,665              1.9
Bad checks                                       35,428              1.8           33,897              1.7
Professional fees                                40,693              2.0           38,564              1.9
All other miscellaneous                          60,637              3.0           61,415              3.1
                                           ------------  ---------------  ---------------  ---------------
TOTAL                                      $  1,995,765            100.0  $     1,998,887            100.0
                                           ============  ===============  ===============  ===============
</TABLE>


                                        9
<PAGE>
Overall,  operating,  general and administrative expenses decreased slightly, by
$3,122  (or  0.16%),  for  the  second quarter of fiscal 2007 as compared to the
comparable  period  of  fiscal  2006.  Significant  reductions  in  depreciation
expense,  advertising  and  promotion  expense, and insurance helped to offset a
significant  increase  in payroll and lesser increases in certain other expenses
in  this category.  Payroll costs increased by $33,354 (or 3.50%) as compared to
the  same  period last year due to an increase in the bonuses awarded or accrued
during  the  quarter  (principally  to  store-level  management  employees)  of
approximately  $4,875  and  increases  in base salaries given to store personnel
during  the  month of April 2006, as well as the addition of one employee to the
Company's  main office staff during the month of October 2005.  While management
strives to control payroll costs as much as possible (such as by using part-time
employees  where  appropriate),  it is also vital to our ability to compete with
larger  grocery retailers that we maintain adequate staffing levels and continue
to  provide  certain customer services (such as grocery carry-out) that increase
labor  costs.  General  and  office  supplies  expense  increased  by $9,781 (or
12.79%)  compared  to  the  corresponding  quarter  of  last  year, due to price
increases  for  some  of  the  routine  supplies  purchased  by  the  Company
(particularly certain petroleum-based packaging materials) as well as to routine
fluctuations  in  the  timing  and volume of supply orders placed by each of our
individual  stores.  Professional  fees  increased  $2,129  (or  5.52%)  due  to
additional  work  and  delays in the filing of our annual report for fiscal 2006
occasioned  by  the  theft loss that was discovered during the annual audit.  We
also  experienced  increases  of  $3,694  (or 9.55%) in bank service charges and
credit  card fees and $1,531 (or 4.52%) in bad checks expense during the current
quarter  as  compared to the prior year period.  As we have previously reported,
the  Company's  practice  of cashing payroll checks for customers at its grocery
store  locations  contributes  to  ongoing increases in these expenses, but they
also  are attributable to increases in merchant fees paid by the Company as more
customers  elect  to  pay  for  grocery  purchases  with debit and credit cards.
Management believes that the practice of cashing customers' checks, while posing
risks  for  the  Company (such as the theft loss that was experienced during the
fourth  quarter  of  fiscal 2006 and recent increases in bad checks expense), is
also  vital  to  our  competitive  strategy for maintaining customer traffic and
growing  sales  in  the  face  of  the increased competition from larger grocery
retailers  that  we have experienced in recent years.  We have installed a check
verification  system  to  reduce  bad  checks  expense  and  are investigating a
possible  upgrade to a more sophisticated system to further combat this problem.
We  are  also  continuously  exploring other measures to improve our process for
managing  customer  check  cashing  activities  and reducing associated expenses
while  continuing  to  offer  this  service  to our customers.  While bad checks
expense  was  still up for the quarter as compared to the same period last year,
this  relatively  modest increase was a considerable improvement over the nearly
29%  increase experienced during the first quarter of fiscal 2007 as compared to
the  prior year, reflecting improved supervision of the check cashing process by
individual  store  managers  as  a  result  of  recent efforts by the Company to
improve  training  and  employee  education  on  this  topic.

Significant  decreases  in these expenses during the quarter included a decrease
of  $31,907 (or 45.89%) in depreciation (reflecting a continued reduction in our
purchases  of new equipment as compared to prior years, as well as the fact that
some of our older equipment is now fully depreciated), a decrease of $20,536 (or
14.46%)  in  advertising  and promotion expense (reflecting the fact that we did
not  run  certain  programs  that  increased  these expenses last year, but also
offset  by  increases in the cost of the other promotions described above during
the  first  two quarters of fiscal 2007), and a decrease of $7,452 (or 4.51%) in
insurance  expense  (due  mainly to timing issues involving premium payments and
refunds  for  new  and  departing  employees).


                                       10
<PAGE>

For  the  quarter  ended November 26, 2005 operating, general and administrative
expenses  increased by $29,816 and represented 24.84% of sales versus 24.06% for
the same period in the prior year.  The primary components of this increase were
increases  in supplies expense ($50,233), professional fees ($18,967), utilities
($13,626),  bad  checks  expense ($13,087), bank service charges and credit card
fees  ($12,482),  repairs  and  maintenance  ($16,644),  and  various  other
miscellaneous  items  (aggregating  to  $5,428),  offset  by  decreases in store
payroll  ($39,322),  commercial  insurance  ($12,831)  and advertising and sales
promotion  ($48,498).

Interest and Other Income:
-------------------------

Other  income  (not  including  interest  income) increased from $28,347 for the
quarter  ended  November  26,  2005  to  $35,032  for  the  current quarter, due
principally  to  an  increase  in  the amount the Company charges to cash checks
without  a  grocery purchase and an increase in returned check fees collected by
the  Company,  partially  offset  by  a  decrease  in revenues related to Fed-Ex
shipments  and  other  items  due  to  a  corresponding decrease in the level of
customer  demand  for these services during the current quarter.  The components
of  other  income  for the quarters ended December 2, 2006 and November 26, 2005
were  as  follows:

<TABLE>
<CAPTION>
                                                        THIRTEEN WEEKS ENDED
                                                -------------------------------------
     Description                                December 2, 2006   November 26, 2005
     -----------                                -----------------  ------------------
<S>                                             <C>                <C>
     Check cashing fees                         $          25,235  $           18,156
     Funds received for handling money orders               3,923               3,926
     Vendor's compensation from the States of
       Alabama and Georgia for collecting and
       remitting sales taxes on a timely basis              3,646               3,529
     Returned check fees                                    2,024                 125
     Revenue related to Fed-Ex shipments/other                204               2,611
                                                -----------------  ------------------
TOTAL                                           $          35,032  $           28,347
                                                =================  ==================
</TABLE>

Interest income increased by $1,354, due principally to the higher interest rate
applicable  to  the  Company's bank certificate of deposit during the quarter as
compared  to  the  same  period  of  the  prior  year.


SIX  MONTHS  ENDED  DECEMBER  2,  2006 COMPARED TO SIX MONTHS ENDED NOVEMBER 26,
--------------------------------------------------------------------------------
2005:
----

Sales:
-----

Sales  for  the  six  months  ended December 2, 2006 increased $740,118 or 4.61%
compared  to  the  same  quarter  last  year.  Seven of our eight grocery stores
experienced  sales  increases  for  the first six months of fiscal 2007 (ranging
from  0.79% to 10.40%).  The remaining location, where we had to replace certain
store-level  management  employees in connection with the significant theft loss
that  was  discovered  during  our  annual audit, experienced a sales decline of
2.64%  for the period.  This location also continues to be adversely impacted by
the  fact  that  another  tenant  moved  out  of the shopping center where it is
located  during fiscal 2006, as well as by generally unfavorable traffic pattern
conditions at that location.  As discussed above, we believe these increases are
attributable  to the lower-priced vegetables program introduced during the first
quarter,  as  well  as to the closing of a competitor located between two of the
Company's  stores  and  the  effects  of  high gas prices on consumers' spending
choices.


                                       11
<PAGE>
The  sales decrease of $165,606, or 1.02%, for the six months ended November 26,
2005  as compared to the first six months of the prior fiscal year resulted from
the  net impact of significant sales decreases at three of the Company's grocery
stores  (6.57%,  3.56% and 3.36%, respectively), partially offset by significant
increases  at two other stores (6.64% and 4.69%), while sales at the other three
stores  remained  essentially flat or decreased only slightly.  As stated above,
management attributes both the positive and negative fluctuations in sales noted
for  individual  store  locations  to  factors associated with local competition
within  each  store's  trade  area and to certain geographic and traffic pattern
conditions  affecting  individual  stores,  rather  than to identifiable factors
affecting  multiple  locations.


Gross Margin:
------------

The  Company's gross margin percentage for the six months ended December 2, 2006
decreased  by  0.57%  as compared to the six months ended November 26 2005, from
24.33%  to  23.76%.  As  discussed  above,  this decrease is attributable to the
vegetable  program  and  the other promotional activities implemented during the
first  half  of fiscal 2007, as well as to increased wholesale costs for certain
items  (principally  certain  private  label  merchandise) which we have not yet
succeeded  in  passing  on  through  adjustments  to  our  retail  prices.

The Company's gross margin percentage for the six months ended November 26, 2005
increased  by  0.24% as compared to the six months ended November 27, 2004, from
24.09%  to  24.33%.  This  increase  was  due to management's adjustments to the
Company's  overall  pricing  mix,  including  adjustments  made to recapture the
wholesale  markup  increase  which our primary inventory supplier began charging
during  the  quarter ended February 26, 2005.  However, the overall gross margin
for  the first six months of fiscal 2006 was less than the 24.45% level achieved
during  the  first  quarter, due primarily to the supplier's implementation of a
fuel  surcharge  early  in  the  second  quarter.


Operating, General and Administrative Expenses:
----------------------------------------------

The  Company's  operating,  general  and  administrative  expenses are comprised
mainly  of  personnel  salary and related payroll costs, utilities and telephone
expenses,  rental  payments for leased locations, insurance expense, advertising
and  promotion  expense,  general  and  office  supplies  expense,  repairs  and
maintenance,  depreciation  expense,  bank service charges and credit card fees,
bad  checks  expense, professional fees, and other minor miscellaneous expenses.

The  following  table  details  the  components  of  operating,  general  and
administrative expenses, both in absolute terms and as a percentage of the total
of  all  such  expenses,  for  the  six month periods ended December 2, 2006 and
November  26,  2005:


                                       12
<PAGE>
<TABLE>
<CAPTION>
                                             2007 Six     % of 2007 Six    2006 Six     % of 2006 Six
Expense Item                               Month Amount    Month Total   Month Amount    Month Total
------------                               -------------  -------------  -------------  -------------
<S>                                        <C>            <C>            <C>            <C>

Payroll                                    $   1,987,400           49.6  $   1,911,551           48.2
Utilities & telephone expense                    351,361            8.8        328,873            8.3
Rent                                             320,234            8.0        310,929            7.8
Insurance                                        323,859            8.1        322,994            8.1
Advertising & promotion                          254,198            6.3        292,120            7.4
General & office supplies                        181,959            4.5        174,335            4.4
Repairs & maintenance                            176,123            4.4        180,627            4.6
Depreciation                                      75,162            1.9        135,688            3.4
Bank service charges and credit
card fees                                         82,888            2.1         71,706            1.8
Bad checks                                        79,301            2.0         68,013            1.7
Professional fees                                 59,290            1.5         67,218            1.7
All other miscellaneous                          111,785            2.8        104,622            2.6
                                           -------------  -------------  -------------  -------------
TOTAL                                      $   4,003,560          100.0  $   3,968,676          100.0
                                           =============  =============  =============  =============
</TABLE>

Overall,  operating,  general and administrative expenses increased slightly, by
$34,884  (or  0.88%), for the first six months of fiscal 2007 as compared to the
comparable  period  of  fiscal  2006.  Significant  reductions  in  depreciation
expense,  advertising  and  promotion  expense,  and professional fees helped to
offset significant increases in payroll expense, bank service charges and credit
card  fees  and bad checks expense, as well as lesser increases in certain other
expenses  in  this  category.  Payroll  costs increased by $75,849 (or 3.97%) as
compared  to the same period last year due to an increase in the bonuses awarded
or  accrued during the quarter (principally to store-level management employees)
of approximately $11,376 and increases in base salaries given to store personnel
during  the  month of April 2006, as well as the addition of one employee to the
Company's  main  office  staff  during the month of October 2005. We experienced
increases  of  $11,182  (or 15.59%) in bank service charges and credit card fees
and  $11,288  (or  16.60%)  in  bad  checks  expense during the six months ended
December  2,  2006  as  compared  to  the prior year period. As noted above, the
Company's  practice  of  cashing  payroll  checks  for  customers contributes to
ongoing increases in these expenses, but they also are attributable to increases
in  merchant fees paid by the Company as more customers elect to pay for grocery
purchases  with debit and credit cards. The 16.6% increase in bad checks expense
resulted  from  a  28.6%  increase  during  the  first quarter of fiscal 2007 as
compared  to  the  4.52%  increase experienced in the second quarter, reflecting
improved  supervision  of the check cashing process by individual store managers
as  a  result  of recent efforts by the Company to improve training and employee
education  on  this topic. Other significant increases in these expenses for the
first  six  months  of fiscal 2007 included an increase of $22,488 (or 6.84%) in
utilities  and  telephone  expense  (largely  due  to increasing energy costs in
recent  periods  which  are  beyond  the Company's control), a $9,305 (or 2.99%)
increase  in rent (due to the recent renewal of a lease at one store location at
a  higher  base  rent  as  well as to higher percentage rents based on the sales
increases  noted  above), an increase of $7,624 (or 4.37%) in general and office
supplies  expense  (due  to  price  increases  for  some of the routine supplies
purchased  by  the  Company  (particularly  certain  petroleum-based  packaging
materials) as well as to routine fluctuations in the timing and volume of supply
orders  placed  by each of our individual stores), and an increase of $7,163 (or
6.85%)  in  the  "all  other  miscellaneous"  component (composed primarily of a
$5,735  increase  in


                                       13
<PAGE>
vehicle expenses due to increased vehicle usage as well as increased maintenance
as  we  have  stretched our historical vehicle replacement schedules in order to
reduce  capital  spending).

Significant  decreases  in  these expenses during the first six months of fiscal
2007  included  a  decrease of $60,526 (or 44.61%) in depreciation (reflecting a
continued  reduction  in  our  purchases  of  new equipment as compared to prior
years,  as  well  as  the  fact  that  some  of our older equipment is now fully
depreciated),  a  decrease  of  $37,922 (or 12.98%) in advertising and promotion
expense (reflecting the fact that we did not run certain programs that increased
these  expenses last year, but also offset by increases in the cost of the other
promotions described above during the first half of fiscal 2007), and a decrease
of $7,928 (or 11.79%) in professional fees (due principally to discontinuing the
services of an outside security firm that was contracted for one location during
the  corresponding  period  of  last  year).

For  the  six  months  ended  November  26,  2005,  operating,  general  and
administrative  expenses decreased by $63,814, to 24.74% of sales as compared to
24.88%  for the prior year period.  This decrease was primarily due to decreases
in  store  payroll  ($72,304),  commercial  insurance ($19,617), advertising and
sales promotion ($43,716), and miscellaneous expense ($12,026).  These decreases
were  partially  offset  by  increases in expenses for supplies ($16,473), group
insurance ($19,617), bank service charges and credit card fees ($21,510) and bad
checks  expense  ($25,263).

Interest and Other Income:
-------------------------

Other  income (not including interest income) increased from $49,923 for the six
months  ended  November 26, 2005 to $61,382 for the six months ended December 2,
2006,  due  principally to an increase in the amount the Company charges to cash
checks  without  a  grocery  purchase  and  an  increase  in returned check fees
collected  by the Company, partially offset by a decrease in revenues related to
Fed-Ex  shipments  and  other items due primarily to variations in the volume of
the  associated activity or service provided by the Company during the six month
period. The components of other income for the six months ended December 2, 2006
and  November  26,  2005  were  as  follows:

<TABLE>
<CAPTION>
                                                       TWENTY-SIX WEEKS ENDED
                                                -------------------------------------
     Description                                December 2, 2006   November 26, 2005
     -----------                                -----------------  ------------------
<S>                                             <C>                <C>

     Check cashing fees                         $          42,755  $           33,140
     Funds received for handling money orders               6,824               4,944
     Vendor's compensation from the States of
       Alabama and Georgia for collecting and
       remitting sales taxes on a timely basis              6,856               7,080
     Returned check fees                                    2,580                 415
     Revenue related to Fed-Ex shipments/other              2,367               4,344
                                                -----------------  ------------------
     TOTAL                                      $          61,382  $           49,923
                                                =================  ==================
</TABLE>

Interest  income  increased by $2,382 for the first six months of fiscal 2007 as
compared  to  the prior year period, due principally to the higher interest rate
applicable to the Company's bank certificate of deposit as compared to the prior
year.


                                       14
<PAGE>
INCOME TAXES:
------------

The  Company accounts for income taxes in accordance with the provisions of SFAS
No.  109,  "Accounting  for  Income  Taxes," which requires that deferred income
taxes  be  determined  based  on the estimated future tax effects of differences
between  the  financial  statement and tax bases of assets and liabilities given
the provisions of the enacted tax laws.  Valuation allowances are used to reduce
deferred  tax  assets  to  the  amount  considered  likely  to  be  realized.

No  amounts  have  been  provided for current and deferred federal and state tax
expense in the statements of income for the six months ended December 2, 2006 or
November 26, 2005, as a result of continued net operating losses and the related
full  valuation  of  the  Company's  net  deferred  tax  assets.


INFLATION:
---------

The Company continues to seek ways to cope with the threat of inflation.  To the
extent  permitted  by  competition, increased costs of goods and services to the
Company  are  reflected in increased selling prices for the Company's goods.  As
discussed above, however, competitive conditions often delay our ability to pass
through price increases experienced at the wholesale level.  When the Company is
forced  to  raise  overall prices of its goods, the Company attempts to preserve
its  market  share  by  competitive  pricing  strategies  that  emphasize
weekly-advertised  specials.

                               FINANCIAL CONDITION
                               -------------------

LIQUIDITY AND CAPITAL RESOURCES:
-------------------------------

Changes in the Company's liquidity and capital resources during the periods
presented resulted primarily from the following:

During  the  twenty-six  weeks  ending  December  2, 2006, the Company generated
$9,438 in cash flow from operating activities, primarily due to the effects of a
$90,048 increase in accounts payable, net income of $23,578, depreciation (which
is  a  non-cash  expense)  of  $75,743  and  an  increase  of  $20,223  in other
liabilities,  offset  by  increases  of  $45,597 in accounts receivable (largely
attributable  to  increases in advertising and volume-based rebates from vendors
as  compared  to  prior  periods),  $68,818  in  inventories  (due  to  seasonal
requirements, as discussed below) and $63,345 in prepaid expense (largely due to
timing  differences  in  payments for insurance premiums and prepaid maintenance
contracts  on  our  cash  registers  and  scanning  equipment) and a decrease of
$22,394  in  sales  tax  payable  (due  largely to the timing of state sales tax
payments  in  relation to quarterly sales levels).  Total accounts receivable of
$215,913  at  December  2,  2006 still included $24,000 of anticipated insurance
recoveries  not  yet  received  which  are  related to the theft loss discovered
during our fiscal 2006 year-end audit.  We generated only $199 in cash flow from
investing  activities  during  this  six  month  period (consisting of a $10,739
reduction in the balance of our certificate of deposit offset by $10,540 used to
fund  purchases  of  property  and  equipment  (consisting  of  additional store
shelving purchased for our seventh and eighth grocery store locations as well as
the  replacement  of  the  front door at one grocery store and purchase of a new
dumpster  for  waste  disposal  at  another  store  location).  We  reduced  the
Company's  long-term  debt  by  $41,007  and  its short-term debt by $13,410 and
redeemed  $7,769  in  common  stock.  Overall the Company decreased its cash and
cash  equivalents  in  the amount of $52,549 during the six month period.  While
capital  spending  only  amounted  to  $10,540 during the twenty-six weeks ended
December  2,  2006, it is anticipated that at least one vehicle will be replaced
during  the  next  fiscal  quarter.


                                       15
<PAGE>
During  the twenty-six weeks ending November 26, 2005, the Company decreased its
cash  and  cash  equivalents in the amount of $34,494, increased its draws under
its  line  of  credit  with  Northwest  Georgia  Bank  by $100,000, bringing the
outstanding  line  balance  to  the full $500,000 available to the borrowed, and
incurred  additional  long-term debt in the amount of $22,212 in connection with
the  purchase  of  a new vehicle.  We paid down the Company's existing long-term
debt by approximately $118,000 during this twenty-six week period, increased our
certificate  of  deposit  by approximately $3,800 and made principal payments on
short-term notes in the amount of $3,000.  The impact on the Company's liquidity
of  the year to date net loss of $37,143 for the first six months of fiscal 2006
was  lessened  somewhat  by  the  fact  that  the  year to date results included
$141,276 in non-cash depreciation and amortization charges, which have no impact
on  the  Company's  cash flow.  Purchases of property and equipment approximated
$53,700  for the twenty-six weeks ended November 26, 2005, including replacement
of  two  vehicles  financed  through payment of $23,265 in cash and manufacturer
financing  in  the  amount  of $22,212 on one of the vehicles, plus the trade-in
value  received  for  the two older vehicles replaced.  Subsequent to the end of
the  quarter,  we completed the early payoff of the note incurred to finance the
addition  of  our  seventh grocery store, which was due to mature in April 2006.

The  ratio  of current assets to current liabilities was 1.66 to 1 at the end of
the  latest quarter, December 2, 2006 compared to 1.74 to 1 on November 26, 2005
and  1.66  to  1 at the end of the fiscal year ended on June 3, 2006. Cash, cash
equivalents  and  the  certificate  of  deposit  constituted 18.42% of the total
current  assets  at December 2, 2006, as compared to 18.59% of the total current
assets  at  November  26,  2006  and  21.17% at June 3, 2006. As the Company has
experienced  continued  operating losses in recent years, we have been forced to
rely  more  extensively  on  managing  other  elements  of the Company's overall
working  capital  structure  (such  as  the  increases in accounts payable noted
above),  as  well  as on additional borrowings under the line of credit, to fund
ongoing  operations.  During  the  last  two  years, management also has limited
additional  capital  spending  and has been attempting to control costs in other
areas  to  moderate  the  effects of these developments on the Company's overall
liquidity  by  reducing  the  Company's  working  capital  requirements.

In  general,  management also has been working to reduce the Company's inventory
levels as an additional means of providing working capital. However, inventories
at  December 2, 2006 increased by $68,818 over the inventory at year-end June 3,
2006,  due  to  seasonal  requirements  for increased inventory to meet customer
demand  during  the  holiday  periods  in  November  and  December.

Historically,  the  Company  has  financed  its  working  capital  requirements
principally  through  its  cash  flow  from  operations. Short-term borrowing to
finance inventory purchases is provided by the Company's $500,000 line of credit
from  its  bank and through borrowings from related parties, as discussed below.
The  bank  line of credit is secured by the Company's certificate of deposit, as
well  as by a security interest in substantially all of our accounts receivable,
inventory,  machines  and  equipment,  furniture  and  fixtures  and by personal
guarantees  of  Michael  A. Richardson and Paul R. Cook, the Company's President
and  CEO  and  Executive  Vice President and CFO, respectively. While we believe
that these sources will continue to provide us with adequate liquidity to supply
the  Company's  working capital needs, if the Company's operating losses were to
increase relative to depreciation and other non-cash charges, our operating cash
flows could be adversely affected. If this happens, we could be required to seek
additional  financing through bank loans, or other sources, in order to meet our
working capital needs. If we were required to seek such additional financing and
were  not  able to obtain it, or were unable to do so on commercially reasonable
terms,  we  could  be  required  to  reduce  the  Company's  current


                                       16
<PAGE>
level  of  operations  in  order  to lower our working capital requirements to a
level  that  our  present  financing  arrangements  would  support.

Short-term borrowings as of specific dates are presented below:

<TABLE>
<CAPTION>
                              December 2,   June 3,   November 26,
                                  2006        2006        2005
                              ------------  --------  -------------
<S>                           <C>           <C>       <C>
Michael and Diana Richardson  $     12,325  $ 11,840  $      12,190
Matthew Richardson                   1,400    15,291         20,054
Line of Credit                     499,996   500,000        500,000
                              ------------  --------  -------------
TOTAL                         $    513,721  $527,131  $     532,244
                              ============  ========  =============
</TABLE>

During  the first six months of fiscal 2007, we reduced the Company's borrowings
from  related parties by a net amount of $13,406 (reflecting payments of $14,000
net  of $594 in additional interest accrued) and reduced the outstanding balance
under  the  line  of  credit by a net amount of $4 (reflecting payments of $4 in
principal  and  $20,504  in  interest).

The  Company's  line  of  credit  with  Northwest Georgia Bank bears interest at
prime,  subject  to  a 6.0% floor.  Notes to Michael and Diana Richardson and to
Matthew  Richardson  are  unsecured, payable on demand and bear interest at .25%
below  the  base  rate  charged by Northwest Georgia Bank on the line of credit.
Michael  Richardson  is Chairman of the Board and Chief Executive Officer of the
Company.  Diana  Richardson  is  the  wife  of  Michael  Richardson, and Matthew
Richardson  is  their  son.

LONG-TERM DEBT:
--------------

At  December  2,  2006,  long-term debt consisted of a note payable to Northwest
Georgia  Bank  of  $162,934 incurred in December 2003 to finance the addition of
the Company's eighth grocery store.  In addition, one vehicle has been purchased
and  financed  through Ford Motor Credit, with a balance due at December 2, 2006
of  $18,676.  Long-term  debt  as  of  specific  dates  is  presented  below:

<TABLE>
<CAPTION>
                                                December 2,   June 3,   November 26,
                                                    2006        2006        2005
                                                ------------  --------  -------------
<S>                                         <C>           <C>       <C>
     Note payable, Bank, secured by
     all inventory, machinery and
     equipment, due $6,781 monthly
     plus interest at prime with 6% floor
     through December 2008.                     $    162,934  $196,020  $     228,722

     Note payable, Bank, secured by
     all inventory, machinery and
     equipment, due $11,381 monthly
     plus interest at the prime rate
     through September 2006.                              --     5,941         72,584

     Note payable, Bank, secured by
     all inventory, machinery and
     equipment, due $3,576 monthly
     plus interest at the prime rate plus 1.5%
     through April, 2006.                                 --        --          6,941

     Vehicle loans; collateralized by
     automobiles due $433 monthly
     through December 2010.                           18,676    20,656         22,212
                                                ------------  --------  -------------
                                                $    181,610  $222,617  $     330,459
     Less current maturities                          74,712    78,120        150,615
                                                ------------  --------  -------------
                                                $    106,898  $144,497  $     179,844
                                                ============  ========  =============
</TABLE>


                                       17
<PAGE>
The  following  is  a  schedule  by  years  of  the  amount of maturities of all
long-term  debt  subsequent  to  December  2,  2006:

<TABLE>
<CAPTION>
          Twelve Months
          Ending November       Amount
          ---------------       -------
<S>                             <C>
                2007            $74,712
                2008             81,025
                2009             20,458
                2010              5,000
                2011                415
</TABLE>

During  the  quarter  ended  December  2,  2006 retained earnings increased as a
result  of  the  Company's  net  income  for  the  quarter.


CRITICAL ACCOUNTING POLICIES:
----------------------------

Critical  accounting  policies  are  those policies that management believes are
important  to  the portrayal of the Company's financial condition and results of
operations  and  require  management's  most  difficult,  subjective  or complex
judgments,  often  as a result of the need to make estimates about the effect of
matters  that  are  inherently  uncertain.

Management  has determined valuation of its inventories as a critical accounting
policy.  Inventories  are  stated  at  the  lower  of  average  cost  or market.


OFF-BALANCE SHEET ARRANGEMENTS:
------------------------------

The  Company had no significant off-balance sheet arrangements as of December 2,
2006.


RELATED PARTY TRANSACTIONS:
--------------------------

Except  as  discussed  under  "Liquidity  and  Capital Resources," there were no
material  related  party  transactions  during  the twenty-six week period ended
December  2,  2006.


FORWARD - LOOKING STATEMENTS:
----------------------------

Information  provided  by the Company, including written or oral statements made
by  its representatives, may contain "forward looking information" as defined in
Section  21E  of the Securities Exchange Act of 1934, as amended. All statements
which  address  activities,  events  or developments that the Company expects or
anticipates  will or may occur in the future, including such things as expansion
and  growth of the Company's business, the effects of future competition, future
capital  expenditures  and  the Company's business strategy, are forward-looking
statements.  In reviewing such information it should be kept in mind that actual
results  may  differ  materially  from  those  projected  or  suggested  in such
forward-looking statements. This forward-looking information is based on various
factors  and  was  derived utilizing numerous assumptions. Many of these factors
previously  have  been identified in filings or statements made on behalf of the
Company,  including  filings  with  the  Securities  and  Exchange  Commission


                                       18
<PAGE>
on  Forms 10-Q, 10-K and 8-K.  Important assumptions and other important factors
that could cause actual results to differ materially from those set forth in the
forward-looking  statements, include the following (in addition to those matters
discussed  in  the Risk Factors included in Part I, Item 1A of our Annual Report
on  Form  10-K  for  the fiscal year ended June 3, 2006): changes in the general
economy  or  in  the  Company's  primary  markets,  the effects of ongoing price
competition  from competitors with greater financial resources than those of the
Company,  changes  in  consumer  spending,  the  nature  and extent of continued
consolidation  in  the grocery store industry, changes in the rate of inflation,
changes  in  state  or federal legislation or regulation, adverse determinations
with  respect to any litigation or other claims, inability to develop new stores
or  complete  remodels as rapidly as planned, stability of product costs, supply
or  quality  control  problems  with the Company's vendors, and other issues and
uncertainties  detailed  from  time-to-time  in  the  Company's filings with the
Securities  and  Exchange  Commission.


ITEM 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The  Company  does  not  engage  in derivative transactions, nor does it hold or
issue  financial  instruments  for  trading  or  other speculative purposes. The
Company is exposed to market risk related to changes in interest rates primarily
as  a  result  of  its  borrowing activities. The effective interest rate on the
Company's  borrowings  under  its  Line  of  Credit  Agreements  and  under  its
outstanding  notes varies with the prime rate. The Company does not maintain any
interest  rate  hedging  arrangements.  Based  on  the  Company's  outstanding
indebtedness  at  December  2,  2006  (and annualized to represent a full twelve
months  of  results),  a  one percent (1.0%) increase in the prime interest rate
would  increase  interest  expense  applicable  to  our  variable rate debt (and
decrease  our  net  income)  by approximately $6,800 annually. Conversely, a one
percent  (1.0%)  decrease  in  the  prime  interest rate would decrease interest
expense  applicable  to  our variable rate debt (and increase our net income) by
approximately  $6,800  annually.  All of the Company's business is transacted in
U.S. dollars and, accordingly, foreign exchange rate fluctuations have never had
a  significant  impact  on  the  Company  and  they  are  not expected to in the
foreseeable  future.


ITEM 4.     CONTROLS AND PROCEDURES

As  of the end of the period covered by this quarterly report, an evaluation was
performed,  under  the supervision and with the participation of our management,
including the Company's Chief Executive Officer and the Chief Financial Officer,
of  the  effectiveness  of  the design and operation of the Company's disclosure
controls  and  procedures  pursuant  to Exchange Act Rule 13a-15.  Based on that
evaluation,  the  Chief  Executive Officer and Chief Financial Officer concluded
that  the Company's disclosure controls and procedures are effective.  No change
in  the  Company's internal control over financial reporting occurred during the
period  covered  by  this  quarterly  report  that  materially  affected,  or is
reasonably  likely  to  materially  affect,  our internal control over financial
reporting.


                                       19
<PAGE>
                            AMERICAN CONSUMERS, INC.

                          PART II     OTHER INFORMATION

ITEM 1A.     RISK FACTORS

Information  regarding  risk  factors appears under the caption "Forward-Looking
Statements"  in  Part  I, Item 2 of this Form 10-Q and in Part I, Item 1A of our
Annual  Report  on  Form 10-K for the fiscal year ended June 3, 2006. There have
been  no  material  changes  from  the  risk factors previously disclosed in our
Annual  Report  on  Form  10-K.

ITEM 2.     UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(c)     Issuer Repurchases:
        ------------------

The  following  table presents information with respect to repurchases of common
stock  made  by  the  Company  during the fiscal quarter covered by this report:

<TABLE>
<CAPTION>
                                   Average        Total Number of      Maximum Number of
                Total Number        Price        Shares Purchased as  Shares that May Yet
                  of Shares        Paid per      Part of a Publicly      Be Purchased
Period          Purchased (1)       Share          Announced Plan       Under the Plan
------          -------------  ----------------  -------------------  -------------------
<S>             <C>            <C>               <C>                  <C>
September 3 -
Sept. 30, 2006          3,300  $           1.00                   --                   --
October 1,  -
Oct. 28, 2006           2,257              1.00                   --                   --
October 29,  -
Dec. 2, 2006            1,320              1.00                   --                   --
                -------------  ----------------  -------------------  -------------------
TOTAL                   6,877  $           1.00                   --                   --
                =============  ================  ===================  ===================
</TABLE>

(1)  Represents shares repurchased at $1.00 per share in response to unsolicited
     requests  from  unaffiliated  shareholders  during  the  quarter.

ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The  Company  held  its  Annual  Meeting of Shareholders on October 19, 2006, at
which  shareholders  were  asked  to  vote  on the election of directors for the
fiscal  year  ending  in  2007. 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 as to each nominee having
been  as  follows:

<TABLE>
<CAPTION>
                        TOTAL    VOTES   VOTES
                        SHARES   CAST     CAST     VOTES     BROKER
NOMINEE                 VOTED     FOR    AGAINST  WITHHELD  NON-VOTES
---------------------  -------  -------  -------  --------  ---------
<S>                    <C>      <C>      <C>      <C>       <C>

Michael A. Richardson  575,456  573,036    2,420      0         0
Paul R. Cook           575,456  575,236      220      0         0
Virgil E. Bishop       575,456  575,192      264      0         0
Thomas L. Richardson   575,456  573,036    2,420      0         0
Andrew V. Douglas      575,456  575,236      220      0         0
Danny R. Skates        575,456  575,236      220      0         0
</TABLE>


                                       20
<PAGE>
ITEM 6     EXHIBITS

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

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

     (31.1)  CEO  Certification  pursuant  to  Exchange  Act Rules 13a-14(a) and
             15d-14(a).

     (31.2)  CFO  Certification  pursuant  to  Exchange  Act Rules 13a-14(a) and
             15d-14(a).

     (32.1)  CEO  Certification  pursuant  to  Exchange  Act Rules 13a-14(b) and
             15d-14(b).

     (32.2)  CFO  Certification  pursuant  to  Exchange  Act Rules 13a-14(b) and
             15d-14(b).


                                       21
<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)


Date:    January 10, 2007               /s/ Michael A. Richardson
       --------------------             ------------------------------
                                        Michael A. Richardson
                                        CHAIRMAN OF THE BOARD AND
                                        CHIEF EXECUTIVE OFFICER
                                        (Principal Executive Officer)

Date:    January 10, 2007               /s/ Paul R. Cook
       --------------------             ------------------------------
                                        Paul R. Cook
                                        EXECUTIVE VICE PRESIDENT AND
                                        TREASURER
                                        (Principal Financial Officer & Chief
                                        Accounting Officer)


                                       22
<PAGE>
                            AMERICAN CONSUMERS, INC.

                                  EXHIBIT INDEX


Exhibits filed with this report:


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

     (31.1)  CEO  Certification  pursuant  to  Exchange  Act Rules 13a-14(a) and
             15d-14(a).

     (31.2)  CFO  Certification  pursuant  to  Exchange  Act Rules 13a-14(a) and
             15d-14(a).

     (32.1)  CEO  Certification  pursuant  to  Exchange  Act Rules 13a-14(b) and
             15d-14(b).

     (32.2)  CFO  Certification  pursuant  to  Exchange  Act Rules 13a-14(b) and
             15d-14(b).


                                       23