EXHIBIT (13)


          Information Incorporated by Reference from Annual Report to
              Shareholders for the Fiscal Year ended May 29, 2004



<PAGE>
<TABLE>
<CAPTION>
                               AMERICAN  CONSUMERS,  INC.

                           FIVE-YEAR  SUMMARY  OF  OPERATIONS

                        (In thousands, except per share amounts)

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

                                                      FISCAL YEAR ENDED
                                    ----------------------------------------------------
                                     MAY 29     MAY 31     JUNE 1     JUNE 2     JUNE 3
                                      2004       2003       2002       2001       2000
                                    ---------  ---------  ---------  ---------  --------
<S>                                 <C>        <C>        <C>        <C>        <C>
NET SALES                           $ 30,011   $ 29,625   $ 28,900   $ 25,635   $25,619
                                    ---------  ---------  ---------  ---------  --------

COST AND EXPENSES:
  Cost of goods sold                  22,819     22,524     22,313     19,561    19,682
  Operating, general and
    administrative expenses            7,473      7,098      6,881      6,137     6,020
  Interest expense                        45         56         73         26        56
  Other income, net                      (90)       (93)       (96)       (94)      (66)
                                    ---------  ---------  ---------  ---------  --------

     Total                            30,247     29,585     29,171     25,630    25,692
                                    ---------  ---------  ---------  ---------  --------

Income (loss) before income taxes       (236)        40       (271)         5       (73)
                                    ---------  ---------  ---------  ---------  --------

INCOME TAXES:
  Federal                                  -          -        (42)        (3)      (18)
  State                                    -          -         (2)         -        (4)
                                    ---------  ---------  ---------  ---------  --------

     Total                                 -          -        (44)        (3)      (22)
                                    ---------  ---------  ---------  ---------  --------

NET INCOME (LOSS)                   $   (236)  $     40   $   (227)  $      8   $   (51)
                                    =========  =========  =========  =========  ========

PER SHARE AMOUNTS:
  Net income (loss)                 $   (.29)  $    .05   $   (.27)  $    .01   $  (.06)
                                    =========  =========  =========  =========  ========

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

WEIGHTED AVERAGE NUMBER
  OF SHARES OUTSTANDING                  814        818        825        832       838
                                    =========  =========  =========  =========  ========

TOTAL ASSETS                        $  4,090   $  4,046   $  4,469   $  4,566   $ 3,674
                                    =========  =========  =========  =========  ========

LONG-TERM DEBT                      $662,078   $514,236   $681,154   $169,421   $     -
                                    =========  =========  =========  =========  ========

OBLIGATIONS UNDER CAPITAL
  LEASE AGREEMENTS                  $      -   $      -   $      -   $      3   $    67
                                    =========  =========  =========  =========  ========
</TABLE>


                                      - 3 -
<PAGE>
                         MARKET AND DIVIDEND INFORMATION


     The  Company's  common stock is traded in the over-the-counter market.  The
approximate  number  of  record holders of the Company's common stock at May 29,
2004,  was  838.  The  following  table  gives  the  range  of  high and low bid
quotations  and  dividends  for  each  quarterly  period for the two most recent
fiscal  years.

<TABLE>
<CAPTION>
                   Bid Prices   Asked Prices  Dividends
-------------------------------------------------------
                  High    Low   High    Low   Per Share
                  -----  -----  -----  -----  ---------
<S>               <C>    <C>    <C>    <C>    <C>
2004
  First Quarter   $0.80  $0.80  $4.00  $4.00  None
  Second Quarter  $0.80  $0.80  $4.00  $4.00  None
  Third Quarter   $0.80  $0.80  $4.00  $4.00  None
  Fourth Quarter  $0.87  $0.87  $1.50  $1.50  None

2003
  First Quarter   $0.85  $0.85  $0.95  $0.95  None
  Second Quarter  $0.76  $0.76  $3.00  $3.00  None
  Third Quarter   $0.76  $0.76  $2.00  $2.00  None
  Fourth Quarter  $0.80  $0.80  $4.00  $4.00  None
</TABLE>

     The  information  set  forth  in  the  above table is supplied through Pink
Sheets  LLC  where  available.

     There  is no established public trading market for the Company's stock, and
the  information  set  forth  above  is  based  on  a  small  number of isolated
quotations  of  which  do  not  necessarily  represent  actual  trades.  The
market-makers  as  of  May  29,  2004,  are:

     Carr Securities Corporation       (516) 944-8300

     Hill Thompson Magid & Co.         (800) 631-3083

     Monroe Securities, Inc.           (800) 766-5560

     Howe Barnes Investments, Inc.     (800) 621-2364

     Wien Securities Corp.             (800) 624-0050


                                      - 4 -
<PAGE>
                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

                              RESULTS OF OPERATIONS
                              ---------------------

     The  Company  realized  an  after-tax loss in its fiscal year ended May 29,
2004,  of $236,050 as compared to a profit of $40,134 for the prior fiscal year.
Net  sales  for  the  current  fiscal year increased 1.3% from net sales for the
previous fiscal year.  The sales increase is due to the opening of the Company's
eighth store in January of 2004.  Same store sales for the past fiscal year were
actually  down  2.5%.

     The  Company's gross margin increased from 22.79% for the fiscal year ended
June 1, 2002 to 23.97% for both the past two fiscal years.  The gross margin was
23.69%  for  the  year  ended  June  2,  2001.  A  switch of our major inventory
supplier  in  the  last  quarter of fiscal 2000 resulted in an increase in gross
margin  from 2000 to 2001.  However, gross margin decreased for fiscal year 2002
due  in  part  to  the  periodic use of more aggressive pricing strategies in an
effort  to  compete  with larger discount grocery chains and expand sales at all
locations.  A  slight  improvement  in  gross margin during the third quarter of
fiscal  2004,  which  resulted  from  the Company adjusting its retail prices to
catch  up  with recent wholesale price increases which were not passed on to the
customer  immediately,  was  offset  by  increased  expenses  related  to  the
establishment of our eighth grocery store and the same-store sales declines.  As
a  result,  overall  gross  margin  remained  flat for 2004 as compared to 2003.
Management actively monitors the Company's mix of retail prices and will attempt
to  achieve  further  improvements  in  gross margin, to the extent permitted by
competition.  Due  to  competitive  conditions, however, further improvements in
the  gross  margin  may  not  be  achievable  at  this  time.

     The Company's Operating, General and Administrative Expenses for the fiscal
year  ended  May  29, 2004, increased by $375,477 from the previous fiscal year.
Expenses  as a percentage of sales increased from 23.96% to 24.90% over the past
fiscal  year.  Operating, General and Administrative Expenses amounted to 23.81%
of  net  sales  for  fiscal  year  2002.  A  portion  of  the  2004  increase
(approximately  $22,000)  was  due  to the establishment of the Company's eighth
store  in  December  of 2003 and hiring employees for a two week period prior to
opening  the  store in order to clean the store and make necessary repairs prior
to  opening.  During  this two week period the Company incurred additional labor
and  occupancy expenses without any offsetting increase in revenue from sales at
the  new  location.  The majority of the remaining increase was due to increases
in  payroll  expense  at  all  eight  of  the  Company's grocery stores and to a
significant increase in our workers' compensation insurance premium.  Management
will  continue  to  monitor  these  costs and make adjustments when deemed to be
beneficial  to  business.

     Increased  pressure  from  competition on the Company's market share, sales
and  profits  during fiscal year 2004 continues to threaten the profitability of
the Company.  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 continuously seeks to improve
the gross margin and increase profitability by obtaining the lowest cost for the
Company's  inventory.

     Interest expense varied throughout the fiscal years presented, from $72,944
in  2002  to $55,745 in 2003 to $45,100 in 2004.  The expense is attributable to
financing  the  purchase  of  new  replacements  for cash registers and scanning
equipment  in  2002  which  previously  had  been  leased,


                                      - 5 -
<PAGE>
the  purchase  of the Company's seventh retail store in late April 2001, and the
opening  of  the  Company's  eighth  store  in  January  2004.

     Other income for the past three fiscal years consists of the following:

<TABLE>
<CAPTION>
                                  2004      2003      2002
                                 -------  --------  --------
<S>                              <C>      <C>       <C>

  Vendors' compensation          $13,664  $13,227   $13,095
  Gain (loss) on sale of assets        -   (1,127)   (8,472)
  Interest income                 13,728   17,480    20,347
  Other income                    62,694   63,706    70,566
                                 -------  --------  --------

      Totals                     $90,086  $93,286   $95,536
                                 =======  ========  ========
</TABLE>

     The Company seeks to improve its profitability by obtaining the lowest cost
for  its  goods.  In  an  effort  to lower its cost of goods, the Company ceased
using  Fleming Co., Inc. as its major supplier of staple groceries in March 2000
and  began  purchasing  its  inventory  from  Mitchell  Grocery  Corporation  in
Albertville,  Alabama.

Income  Taxes
-------------

     The provision for income taxes does not vary significantly from the Federal
and  state statutory rates.  The components of income tax are detailed in Note 5
of  the  Company's  financial  statements.

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.
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
----------------------------------

     The  Company  finances its working capital requirements principally through
its  cash  flow from operations and short-term borrowings.  Short-term borrowing
to  finance  inventory  purchases  is provided by the Company's $500,000 line of
credit  from  its  bank.  Based  upon  the  Company's  current  working  capital
requirements,  management  believes  that the Company's available credit will be
adequate  to  finance  its  liquidity  needs  for  fiscal year 2005.  Short-term
borrowings at the end of the 2004 and 2003 fiscal years are as follows:

<TABLE>
<CAPTION>
                                              2004      2003
                                            --------  --------
<S>                                         <C>       <C>

  Line of credit at Northwest Georgia Bank  $300,000  $199,900
  Note to Michael and Diana Richardson        13,166    22,631
  Note to Matthew Richardson                  26,884    32,216
                                            --------  --------

      Totals                                $340,050  $254,747
                                            ========  ========
</TABLE>


                                      - 6 -
<PAGE>
     At  May  29,  2004,  long-term debt consists of a note payable to a bank of
$64,212 that was incurred in April 2001 to finance the addition of the Company's
seventh grocery store in Jasper, Tennessee, a note payable to a bank of $264,000
to  finance cash registers and peripheral equipment and a note payable to a bank
of  $324,725  incurred in December 2003 to finance the addition of the Company's
eighth  grocery  store  in Tunnel Hill, Georgia.  In addition, two vehicles were
purchased  and  financed  through  GMAC  with  a balance due at May 29, 2004, of
$9,141.

     The ratio of current assets to current liabilities was 1.97 to 1 at the end
of  fiscal 2004, as compared to 2.25 to 1 at the end of fiscal 2003, and 2.05 to
1  at  the end of fiscal 2002.  Cash, short-term investments and the certificate
of  deposit  constituted  20.42%  of  total  current  assets at May 29, 2004, as
compared  to  32.75% of total current assets at May 31, 2003, and 35.22% at June
2,  2002.

     During the fiscal year ended May 29, 2004, retained earnings decreased as a
result  of  the  net  loss  for  the  fiscal  year.

Material  Commitments
---------------------

     Capital  expenditures  are  not  expected  to  exceed $200,000 for the 2005
fiscal  year.

     The  Company has adopted a 401(k) plan that is administered by Capital Bank
and  Trust  Company.  Participation  in  the  plan is available to all full-time
employees.  Any  contribution  by  the  Company will be at the discretion of the
Board  of Directors.  The Company's contribution to the plan was $7,500 in 2004,
2003  and  2002.

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

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  has  no  significant  off-balance sheet arrangements as of May 29,
2004.

Related  Party  Transactions
----------------------------

Except  as  discussed  under  "Liquidity  and  Capital Resources," there were no
material  related  party transactions during the fiscal year ended May 29, 2004.


                                      - 7 -
<PAGE>
Contractual  Obligations
------------------------

The following table represents the Company's outstanding contractual obligations
at  May  29,  2004:

<TABLE>
<CAPTION>
                                                       PAYMENTS DUE BY PERIOD (IN THOUSANDS)

                                                 LESS THAN 1
CONTRACTUAL OBLIGATIONS                  TOTAL       YEAR      1-3 YEARS   4-5 YEARS   AFTER 5 YEARS
---------------------------------------  ------  ------------  ----------  ----------  --------------
<S>                                      <C>     <C>           <C>         <C>         <C>
Debt Obligations Excluding Interest (1)  $1,002  $        582  $      301  $      119  $            0
Operating Lease Obligations (2)           1,996           588       1,044         364               0
Other Obligations                             8             8           0           0               0
                                         ------  ------------  ----------  ----------  --------------
TOTAL CONTRACTUAL CASH OBLIGATIONS       $3,006  $      1,178  $    1,345  $      483  $            0
                                         ======  ============  ==========  ==========  ==============
</TABLE>

(1)  Amount  includes  short-term  borrowings of $340 at May 29, 2004, which are
     included  in  the  "Less  than  1  year"  column.

(2)  These obligations relate primarily to leases of the Company's various store
     locations.


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  by  or on behalf of the Company, including filings with the Securities and
Exchange  Commission  of  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:  changes in the
general  economy  or  in  the  Company's primary markets, the effects of ongoing
price  competition  from  competitors  (some  of  which  have  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  detailed from time-to-time in the Company's filings with the
Securities  and  Exchange  Commission.


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


                                      - 8 -
<PAGE>
interest  rate  on  the Company's borrowings under its Line of Credit Agreements
and  under its outstanding notes varies with the prime rate. We believe that our
present  exposure to market risk relating to interest rate risk is not material.
The Company does not maintain any interest rate hedging arrangements. 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.




                                      - 9 -
<PAGE>
                  [LETTERHEAD OF HAZLETT, LEWIS & BIETER, PLLC]




             Report of Independent Registered Public Accounting Firm
             -------------------------------------------------------




To the Board of Directors and Stockholders
American Consumers, Inc.
Fort Oglethorpe, Georgia

     We have audited the accompanying balance sheets of American Consumers, Inc.
as  of  May  29,  2004  and  May 31, 2003, and the related statements of income,
changes  in  stockholders' equity, and cash flows for each of the three years in
the  period  ended  May  29,  2004.  These  financial  statements  are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion  on  these  financial  statements  based  on  our  audits.

     We  conducted  our  audits  in  accordance with the standards of the Public
Company  Accounting  Oversight  Board  (United States).  Those standards require
that  we plan and perform the audit to obtain reasonable assurance about whether
the  financial  statements are free of material misstatement.  An audit includes
examining,  on  a test basis, evidence supporting the amounts and disclosures in
the  financial  statements.  An  audit  also  includes  assessing the accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating  the  overall  financial statement presentation.  We believe that our
audits  provide  a  reasonable  basis  for  our  opinion.

     In  our opinion, the financial statements referred to above present fairly,
in  all material respects, the financial position of American Consumers, Inc. as
of May 29, 2004 and May 31, 2003, and the results of its operations and its cash
flows  for  each  of  the  three  years  in  the  period  ended May 29, 2004, in
conformity  with  U.S.  generally  accepted  accounting  principles.


/S/ HAZLETT, LEWIS & BIETER, PLLC


Chattanooga, Tennessee
July 7, 2004


                                     - 10 -
<PAGE>
<TABLE>
<CAPTION>
                            AMERICAN CONSUMERS, INC.

                              STATEMENTS OF INCOME

     For the Fiscal Years Ended May 29, 2004, May 31, 2003, and June 1, 2002

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

                                            2004          2003          2002
                                         (52 Weeks)    (52 Weeks)    (52 Weeks)
                                        ------------  ------------  ------------
<S>                                     <C>           <C>           <C>
NET SALES                               $30,011,255   $29,624,631   $28,900,428

COST OF GOODS SOLD                       22,819,052    22,524,276    22,312,787
                                        ------------  ------------  ------------

    Gross Profit                          7,192,203     7,100,355     6,587,641

OPERATING, GENERAL AND
  ADMINISTRATIVE EXPENSES                 7,473,239     7,097,762     6,880,939
                                        ------------  ------------  ------------

    Operating Income (loss)                (281,036)        2,593      (293,298)
                                        ------------  ------------  ------------

OTHER INCOME (EXPENSE)
  Interest Expense                          (45,100)      (55,745)      (72,944)
  Other income                               90,086        93,286        95,536
                                        ------------  ------------  ------------

                                             44,986        37,541        22,592
                                        ------------  ------------  ------------

    Income (loss) before income taxes      (236,050)       40,134      (270,706)

FEDERAL AND STATE INCOME
  TAXES                                           -             -       (43,875)
                                        ------------  ------------  ------------

NET INCOME (LOSS)                       $  (236,050)  $    40,134   $  (226,831)
                                        ============  ============  ============

EARNINGS (LOSS) PER SHARE               $      (.29)  $       .05   $      (.27)
                                        ============  ============  ============

WEIGHTED AVERAGE NUMBER
  OF SHARES OUTSTANDING                     814,382       817,802       825,467
                                        ============  ============  ============
</TABLE>


The Notes to Financial Statements are an integral part of these statements.


                                     - 11 -
<PAGE>
<TABLE>
<CAPTION>
                           AMERICAN  CONSUMERS,  INC.

                                 BALANCE  SHEETS

                          May 29, 2004 and May 31, 2003

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

                                         2004          2003
                                     ------------  ------------
<S>                                  <C>           <C>
             ASSETS

CURRENT ASSETS
  Cash and short-term investments    $   335,135   $   745,659
  Certificate of Deposit                 323,488       309,821
  Accounts receivable                    137,463       113,267
  Inventories                          2,363,973     1,997,929
  Prepaid expenses                        65,369        56,141
                                     ------------  ------------

            Total current assets       3,225,428     3,222,817
                                     ------------  ------------




PROPERTY AND EQUIPMENT - at cost
  Leasehold improvements                 273,615       258,122
  Furniture, fixtures and equipment    3,236,063     2,974,836
                                     ------------  ------------

                                       3,509,678     3,232,958
  Less accumulated depreciation       (2,644,738)   (2,409,558)
                                     ------------  ------------

                                         864,940       823,400
                                     ------------  ------------

                                     $ 4,090,368   $ 4,046,217
                                     ============  ============
</TABLE>


The Notes to Financial Statements are an integral part of these statements.


                                     - 12 -
<PAGE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------

                                                             2004        2003
                                                          ----------  ----------
<S>                                                       <C>         <C>
         LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable                                        $  788,330  $  702,170
  Short-term borrowings                                      340,050     254,747
  Current maturities of long-term debt                       241,510     176,184
  Accrued sales tax                                           96,259     115,064
  Federal and state income taxes                                 957         905
  Other                                                      167,588     185,353
                                                          ----------  ----------

         Total current liabilities                         1,634,694   1,434,423
                                                          ----------  ----------

LONG-TERM DEBT                                               420,568     338,052
                                                          ----------  ----------

STOCKHOLDERS' EQUITY
  Nonvoting preferred stock - authorized 5,000,000
    shares of no par value; no shares issued                       -           -
  Nonvoting common stock - $.10 par value; authorized
    5,000,000 shares; no shares issued                             -           -
  Common stock - $.10 par value; authorized 5,000,000
    shares; shares issued of 813,410 in 2004 and 815,996
    in 2003                                                   81,341      81,600
  Additional paid-in capital                                 678,320     680,477
  Retained earnings                                        1,275,445   1,511,665
                                                          ----------  ----------

                                                           2,035,106   2,273,742
                                                          ----------  ----------

                                                          $4,090,368  $4,046,217
                                                          ==========  ==========
</TABLE>



                                     - 13 -
<PAGE>
<TABLE>
<CAPTION>
                           AMERICAN  CONSUMERS,  INC.

               STATEMENTS  OF  CHANGES  IN  STOCKHOLDERS'  EQUITY

     For the Fiscal Years Ended May 29, 2004, May 31, 2003, and June 1, 2002

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


                                         Additional
                               Common     Paid-in      Retained
                               Stock      Capital      Earnings       Total
                              --------  ------------  -----------  -----------
<S>                           <C>       <C>           <C>          <C>
Balance, June 2, 2001         $82,723   $   689,847   $1,699,105   $2,471,675

  Net loss for year                 -             -     (226,831)    (226,831)

  Redemption of common stock     (418)       (3,490)        (277)      (4,185)
                              --------  ------------  -----------  -----------

Balance, June 1, 2002          82,305       686,357    1,471,997    2,240,659

  Net income for year               -             -       40,134       40,134

  Redemption of common stock     (705)       (5,880)        (466)      (7,051)
                              --------  ------------  -----------  -----------

Balance, May 31, 2003         $81,600   $   680,477   $1,511,665   $2,273,742

  Net loss for year                 -             -     (236,050)    (236,050)

  Redemption of common stock     (259)       (2,157)        (170)      (2,586)
                              --------  ------------  -----------  -----------

Balance, May 29, 2004         $81,341   $   678,320   $1,275,445   $2,035,106
                              ========  ============  ===========  ===========
</TABLE>



The Notes to Financial Statements are an integral part of these statements.


                                     - 14 -
<PAGE>
<TABLE>
<CAPTION>
                                      AMERICAN  CONSUMERS,  INC.

                                     STATEMENTS  OF  CASH  FLOWS

               For the Fiscal Years Ended May 29, 2004, May 31, 2003, and June 1, 2002

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

                                                                   2004         2003         2002
                                                                (52 Weeks)   (52 Weeks)   (52 Weeks)
                                                                -----------  -----------  -----------
<S>                                                             <C>          <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income (loss)                                             $ (236,050)  $   40,134   $ (226,831)
  Adjustments to reconcile net income (loss) to net cash
    provided by (used in ) operating activities:
      Depreciation and amortization                                300,212      268,370      259,484
      Deferred income taxes                                              -            -       (3,827)
      Loss on sale of property and equipment                             -        1,127        8,472
      Change in operating assets and liabilities:
        Accounts receivable                                        (24,196)      (4,511)      (3,839)
        Inventories                                               (366,044)       3,410     (107,193)
        Prepaid expenses and other assets                           (9,228)     (15,484)      39,346
        Refundable income taxes                                          -       43,891      (43,891)
        Accounts payable and accrued liabilities                    49,590     (107,511)      42,897
        Federal and state income taxes                                  52       (3,095)      (5,422)
                                                                -----------  -----------  -----------

          Net cash provided by (used in) operating activities     (285,664)     226,331      (40,804)
                                                                -----------  -----------  -----------

CASH FLOWS FROM INVESTING ACTIVITIES
  Purchase of certificate of deposit                              (323,488)    (309,821)    (450,000)
  Proceeds from maturity of certificate of deposit                 309,821      450,000      450,000
  Purchase of property and equipment                              (341,752)     (41,026)    (583,443)
  Proceeds from disposal of property and equipment                       -        6,350        5,000
                                                                -----------  -----------  -----------

          Net cash provided by (used in) investing activities     (355,419)     105,503     (578,443)
                                                                -----------  -----------  -----------

CASH FLOWS FROM FINANCING ACTIVITIES
  Net increase (decrease) in short-term borrowings                  85,303     (155,576)    (386,871)
  Proceeds from long-term debt                                     350,020            -      627,012
  Principal payments on long-term debt                            (202,178)    (166,918)    (115,279)
  Principal payments on obligations under capital leases                 -            -       (3,195)
  Redemption of common stock                                        (2,586)      (7,051)      (4,185)
                                                                -----------  -----------  -----------

          Net cash provided by (used in) financing activities      230,559     (329,545)     117,482
                                                                -----------  -----------  -----------

NET INCREASE (DECREASE) IN CASH
  AND CASH EQUIVALENTS                                            (410,524)       2,289     (501,765)

CASH AND CASH EQUIVALENTS, beginning of year                       745,659      743,370    1,245,135
                                                                -----------  -----------  -----------

CASH AND CASH EQUIVALENTS, end of year                          $  335,135   $  745,659   $  743,370
                                                                ===========  ===========  ===========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION
  Cash paid (received) during the year for:
    Income taxes                                                $    6,356   $  (31,888)  $   13,266
    Interest                                                        44,673       55,060       72,944
                                                                ===========  ===========  ===========
</TABLE>


The Notes to Financial Statements are an integral part of these statements.


                                     - 15 -
<PAGE>
                           AMERICAN  CONSUMERS,  INC.

                        NOTES  TO  FINANCIAL  STATEMENTS

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


Note 1.   Nature of Business and Summary of Significant Accounting Policies

          Nature  of  business:

          The  Company is engaged in a single line of business, the operation of
          a  chain  of retail grocery stores. The stores are located in Georgia,
          Tennessee,  and  Alabama  and  operate  under  the  name  of Shop-Rite
          Supermarket.

          Use  of  estimates:

          The  preparation  of financial statements in conformity with generally
          accepted  accounting  principles requires management to make estimates
          and  assumptions that affect certain reported amounts and disclosures.
          Accordingly,  actual  results  could  differ  from  those  estimates.

          Cash  and  cash  equivalents:

          For  purposes  of  reporting  cash  flows,  the  Company considers all
          highly-liquid  debt  instruments  with  an  original maturity of three
          months  or  less  to  be  cash  equivalents.

          Accounts  receivable:

          The  Company  extends  unsecured  credit  for 30-day terms to selected
          customers  in  the  ordinary  course  of  business,  but mitigates the
          associated  credit risk by carefully screening applicants and actively
          pursuing past due accounts. An allowance for doubtful accounts has not
          been  established since management is of the opinion that all accounts
          receivable  at  year-end  are  fully  collectible.

          Inventories:

          Inventories  are  stated  at  the  lower  of  average  cost or market.

          Property  and  equipment:

          Expenditures  for property and equipment are charged to asset accounts
          at  cost.  Depreciation  is  provided  on  the  straight-line  and
          declining-balance  methods  at  rates  based upon the estimated useful
          lives  of  the  various  classes  of depreciable property. Repairs and
          maintenance are expensed as incurred. Depreciation expense included in
          the statements of income was $300,212, $268,370, and $259,484 in 2004,
          2003  and  2002,  respectively.

          Revenue  recognition:

          The financial statements of the Company are prepared under the accrual
          method of accounting. The Company recognizes income on the sale of all
          grocery  and  non-food  merchandise  at  the  point-of-sale.


                                     - 16 -
<PAGE>
                           AMERICAN  CONSUMERS,  INC.

                        NOTES  TO  FINANCIAL  STATEMENTS

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


Note 1.   Nature  of  Business  and  Summary  of Significant Accounting Policies
          (continued)

          Advertising  costs:

          Advertising costs are charged to operations when incurred. Advertising
          costs  charged  to operations were $571,991, $602,244, and $619,875 in
          2004,  2003,  and  2002,  respectively.

          Deferred  income  taxes:

          Deferred tax assets and liabilities are reflected at currently enacted
          income  tax  rates  applicable to the period in which the deferred tax
          assets  or  liabilities  are  expected  to  be realized or settled. As
          changes  in  tax  laws  or  rates are enacted, deferred tax assets and
          liabilities  are  adjusted  through  the  provision  for income taxes.

          Recent  accounting  pronouncements:

          The  Financial Accounting Standards Board has recently issued a number
          of Statements of Financial Accounting Standards (SFAS). Management has
          evaluated  these  SFASs  and  determined  they  have  no impact on the
          Company's  financial  statements.

Note 2.   Short-Term Borrowings

          The  Company  had  a  line-of-credit  agreement  with  a bank totaling
          $500,000  at  May  29,  2004  and  May  31, 2003. The interest rate on
          amounts outstanding under the line-of-credit agreement fluctuates with
          the  prime  interest  rate.  The  Company's  certificate of deposit is
          pledged  as collateral under this agreement. This agreement matures on
          May  30,  2005.

          At  May  29,  2004  and  May  31,  2003,  the  Company  had short-term
          borrowings  consisting of unsecured notes payable to Michael and Diana
          Richardson,  principal  shareholders of the Company, and to their son,
          Matthew Richardson. These notes provide for interest at .25% below the
          bank's  base  rate  and  are  payable  on  demand.

          A  summary of short-term borrowings for the fiscal years ended May 29,
          2004  and  May  31,  2003,  is  as  follows:

<TABLE>
<CAPTION>
                                              2004       2003
                                            ---------  ---------
<S>                                         <C>        <C>
Line-of-credit agreements                   $300,000   $199,900
Loans payable to shareholders                 40,050     54,847
                                            ---------  ---------

    Total outstanding                       $340,050   $254,747
                                            =========  =========

Weighted average interest rate at year end      5.76%      5.57%
                                            ---------  ---------

Weighted average interest rate during year      5.87%      6.95%
                                            ---------  ---------

Maximum amount outstanding during year      $354,847   $411,024
                                            =========  =========

Average amount outstanding during year      $229,743   $385,893
                                            =========  =========
</TABLE>

          The carrying amount of short-term borrowings approximates fair value.


                                     - 17 -
<PAGE>
<TABLE>
<CAPTION>
                           AMERICAN  CONSUMERS,  INC.

                        NOTES  TO  FINANCIAL  STATEMENTS

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

Note 3.   Long-Term Debt

     Long-term  debt consists of the following notes payable at May 29, 2004 and
     May  31,  2003:

                                                             2004      2003
                                                           --------  --------
<S>                                                        <C>       <C>
  Note payable to Northwest Georgia Bank;
    principal and interest due in monthly installments
    of $11,381, through September 2006; interest
    at prime rate; collateralized by equipment,
    accounts receivable, inventory, and personal
    guarantees of the Company's President and
    Executive Vice President                               $264,000  $387,013

  Note payable to Northwest Georgia Bank;
    principal and interest due in monthly installments
    of $3,576, through April 2006; interest at prime rate
    plus 1.5%; collateralized by equipment, inventory,
    and personal guarantees of the Company's President
    and Executive Vice President                             64,212   102,411

  Note payable to Northwest Georgia Bank;
    principal and interest due in monthly installments
    of $6,781, through December 2008; interest at prime
    rate with 6.00% floor; collateralized by equipment,
    inventory, and personal guarantees of the Company's
    President and Executive Vice President                  324,725         -

  Vehicle installment loans; due in monthly installments
    of $1,305, through December 2004; collateralized
    by automobiles                                            9,141    24,812
                                                           --------  --------
                                                            662,078   514,236

  Less current maturities                                   241,510   176,184
                                                           --------  --------

  Total long-term debt                                     $420,568  $338,052
                                                           ========  ========
</TABLE>

     The  fair  value  of the Company's long-term debt approximates the carrying
     amount  reported  in  the balance sheet based on current interest rates for
     similar  types  of  borrowings.


                                     - 18 -
<PAGE>
                           AMERICAN  CONSUMERS,  INC.

                        NOTES  TO  FINANCIAL  STATEMENTS

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


Note 3.   Long-Term  Debt  (continued)

     The  aggregate  maturities or principal payments required on long-term debt
     for  years  subsequent  to  May  29,  2004,  are  as  follows:

                         Year                Amount
                         ----                ------

                         2005              $241,510
                         2006               224,959
                         2007                76,147
                         2008                73,795
                         2009                45,667

Note 4.   Lease  Commitments

          The  Company  leases  the  facilities  in  which  its  retail  grocery
          operations  are  located  under  noncancelable  operating  leases that
          expire  at  various dates through April 2008. Substantially all of the
          leases  include  renewal options. The following is a schedule by years
          of future minimum rental payments required under operating leases that
          have  initial  or remaining noncancelable lease terms in excess of one
          year  as  of  May  29,  2004:

                         Fiscal              Minimum
                       Year Ending           Rentals
                       -----------          ----------

                          2005              $  587,913
                          2006                 558,975
                          2007                 484,875
                          2008                 269,068
                          2009                  95,440
                                            ----------

                          Total             $1,996,271
                                            ==========

          Rental  expense for the fiscal years ended May 29, 2004, May 31, 2003,
          and  June  1,  2002,  is  as  follows:

<TABLE>
<CAPTION>
                                     2004      2003      2002
                                   --------  --------  --------
<S>                                <C>       <C>       <C>
Minimum rentals                    $577,213  $535,645  $522,135
Contingent rentals based on sales    16,628    10,509     7,402
                                   --------  --------  --------

    Total                          $593,841  $546,154  $529,537
                                   ========  ========  ========
</TABLE>


                                     - 19 -
<PAGE>
                           AMERICAN  CONSUMERS,  INC.

                        NOTES  TO  FINANCIAL  STATEMENTS

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


Note 5.   Federal and State Income Taxes

          The  components  of  income tax expense for the fiscal years ended May
          29,  2004,  May  31,  2003,  and  June  1,  2002,  are  as  follows:

<TABLE>
<CAPTION>
                                        2004   2003     2002
                                        -----  -----  ---------
<S>                                     <C>    <C>    <C>
Current tax expense (benefit):
  Federal                               $   -  $   -  $(38,463)
  State                                     -      -    (1,585)
                                        -----  -----  ---------

                                            -      -   (40,048)
                                        -----  -----  ---------

Deferred tax expense (benefit):
  Federal                                   -      -    (3,297)
  State                                     -      -      (530)
                                        -----  -----  ---------

                                            -      -    (3,827)
                                        -----  -----  ---------

    Total income tax expense (benefit)  $   -  $   -  $(43,875)
                                        =====  =====  =========
</TABLE>

          A  reconciliation  of income tax expense computed by applying the U.S.
          Federal  statutory  rates  to  income  before  income taxes and actual
          income  tax  expense  is  as  follows:

<TABLE>
<CAPTION>
                                           2004       2003      2002
                                         ---------  --------  ---------
<S>                                      <C>        <C>       <C>
Federal income tax expense (benefit)
  computed at the statutory rates        $(35,400)  $ 6,000   $(88,800)
State income tax, net of federal
  income tax benefit                      (13,000)    2,200    (10,700)
Change in deferred tax asset valuation
  allowance                                48,400    (8,200)    23,100
Other                                           -         -     32,525
                                         ---------  --------  ---------

    Total income tax expense (benefit)   $      -   $     -   $(43,875)
                                         =========  ========  =========
</TABLE>


                                     - 20 -
<PAGE>
                           AMERICAN  CONSUMERS,  INC.

                        NOTES  TO  FINANCIAL  STATEMENTS

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


Note 5.   Federal and State Income Taxes (continued)

          The  tax  effects  of  significant temporary differences that comprise
          deferred  tax assets and liabilities at May 29, 2004 and May 31, 2003,
          are  as  follows:

<TABLE>
<CAPTION>
                                                  2004       2003
                                               ----------  ---------
<S>                                            <C>         <C>
Deferred tax assets:
  Net operating loss carryforward              $(143,500)  $(53,700)
  Other                                          (21,000)   (22,100)

Deferred tax liabilities:
  Depreciable basis of property and equipment     80,700     60,900

Deferred tax asset valuation allowance            83,800     14,900
                                               ----------  ---------

                                               $       -   $      -
                                               ==========  =========
</TABLE>

          At  May 29, 2004, the Company has net operating loss carryforwards for
          federal  and  state  income  tax  purposes  of  $467,481 and $633,698,
          respectively.  These  net operating loss carryforwards may be utilized
          to  offset  future  taxable  income  through  2023.

Note 6.   Employee Benefit Plan

          The  Company  has  adopted  a  401(k)  employee  benefit plan covering
          substantially  all  employees  who  have  met  minimum service and age
          requirements.  The  service  and  age requirements were waived for the
          initial  plan  participants  to encourage participation. The Company's
          annual  contribution  is  discretionary. The Company's contribution to
          the  plan  was  $7,500  in  2004,  2003  and  2002.

Note  7.  Concentration  of  Credit  Risk  and  Major  Supplier

          The  Company  maintains  a  certificate  of  deposit and other deposit
          accounts  at financial institutions in amounts that exceed the Federal
          Deposit  Insurance  Corporation  (FDIC)  insurance limit. The total of
          deposits  that  exceeded  the FDIC insurance limit was $327,676 at May
          29,  2004.  The  Company  believes  that maintaining deposits in these
          financial  institutions  does  not represent a significant credit risk
          and  that the Company benefits from favorable banking relationships as
          a  result  of  maintaining  deposits  with  these  institutions.

          Approximately  82  percent  of the Company's purchased merchandise for
          the  year  ended  May  29,  2004, was procured from the Company's main
          supplier.


                                     - 21 -
<PAGE>
                           AMERICAN  CONSUMERS,  INC.

                        NOTES  TO  FINANCIAL  STATEMENTS

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


Note 8.   Related Party Transactions

          As described in greater detail in Note 2 above, the Company finances a
          portion  of  its  working  capital  requirements  through  borrowings
          consisting  of  two  unsecured  notes,  payable  to  Michael and Diana
          Richardson,  principal  shareholders of the Company, and to their son,
          Matthew Richardson. These notes bear interest at a rate per annum .25%
          below  the  base  rate of interest charged on the Company's borrowings
          from  its  lead  bank  and  are  payable  on  demand.



                                     - 22 -
<PAGE>
<TABLE>
<CAPTION>
                           AMERICAN  CONSUMERS,  INC.

                        NOTES  TO  FINANCIAL  STATEMENTS

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

Note 9.   Quarterly Data (unaudited)

                                                                             Years Ended
                                    --------------------------------------------------------------------------------------
                                                            May 29, 2004                              May 31, 2003
                                    ----------------------------------------------------------  --------------------------
                                      Thirteen       Thirteen       Thirteen       Thirteen       Thirteen      Thirteen
                                     Weeks Ended    Weeks Ended    Weeks Ended    Weeks Ended   Weeks Ended   Weeks Ended
                                      5/29/2004      2/28/2004     11/29/2003      8/30/2003     5/31/2003      3/1/2003
                                    -------------  -------------  -------------  -------------  ------------  ------------
<S>                                 <C>            <C>            <C>            <C>            <C>           <C>
Net Sales                           $  7,872,486   $  7,604,053   $  7,201,004   $  7,333,712   $  7,573,874  $  7,496,786
Cost of goods sold                     6,036,816      5,704,260      5,491,030      5,586,946      5,762,462     5,681,465
                                    -------------  -------------  -------------  -------------  ------------  ------------

  Gross profit                         1,835,670      1,899,793      1,709,974      1,746,766      1,811,412     1,815,321

Operating, general and
  administrative expenses              1,994,369      1,950,405      1,754,769      1,773,696      1,770,512     1,813,083
                                    -------------  -------------  -------------  -------------  ------------  ------------

  Operating income (loss)               (158,699)       (50,612)       (44,795)       (26,930)        40,900         2,238

Other income                              20,234         22,395         24,944         22,513          4,469        27,501
Interest expense                          12,847         13,521          8,864          9,868         11,674        13,535
                                    -------------  -------------  -------------  -------------  ------------  ------------

Income (loss) before income taxes       (151,312)       (41,738)       (28,715)       (14,285)        33,695        16,204
Income taxes                                   -              -              -              -              -             -
                                    -------------  -------------  -------------  -------------  ------------  ------------

Net income (loss)                   $   (151,312)  $    (41,738)  $    (28,715)  $    (14,285)  $     33,695  $     16,204
                                    =============  =============  =============  =============  ============  ============


Earnings (loss) per common share:   $      (0.18)  $      (0.05)  $      (0.04)  $      (0.02)  $       0.04  $       0.02
                                    =============  =============  =============  =============  ============  ============


                                             Years Ended
                                    ---------------------------
                                            May 31, 2003
                                    ---------------------------
                                      Thirteen      Thirteen
                                    Weeks Ended    Weeks Ended
                                     11/30/2002     8/31/2002
                                    ------------  -------------
<S>                                 <C>           <C>
Net Sales                           $  7,237,978  $  7,315,993
Cost of goods sold                     5,479,700     5,600,649
                                    ------------  -------------

  Gross profit                         1,758,278     1,715,344

Operating, general and
  administrative expenses              1,757,107     1,757,060
                                    ------------  -------------

  Operating income (loss)                  1,171       (41,716)

Other income                              34,380        26,936
Interest expense                          15,485        15,051
                                    ------------  -------------

Income (loss) before income taxes         20,066       (29,831)
Income taxes                                   -             -
                                    ------------  -------------

Net income (loss)                   $     20,066  $    (29,831)
                                    ============  =============


Earnings (loss) per common share:   $       0.03  $      (0.04)
                                    ============  =============
</TABLE>


                                     - 23 -
<PAGE>