SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549


                                    FORM 10-Q


    X    Quarterly  report  pursuant  to Section  13 or 15(d) of the  Securities
---------Exchange Act of 1934
                                                                            
         For the  quarterly  period ended  September  26, 1998  Commission  File
         Number 0-27050 
                -------

---------Transition  report  pursuant  to Section 13 or 15(d) of the  Securities
         Exchange Act of 1934 For the transition period from _____ to _____

                                 PHAR-MOR, INC.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

         PENNSYLVANIA                                          25-1466309
------------------------------------------------           ---------------------
         (State or other jurisdiction of                   (I.R.S. Employer
         incorporation or organization)                    Identification No.)


         20 Federal Plaza West, Youngstown, Ohio            44501-0400         
------------------------------------------------           ---------------------
         (Address of principal executive offices)          (Zip code)


Registrant's telephone number, including area code:        (330) 746-6641     
                                                           --------------

         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  has filed all documents
and reports  required to be filed by Sections 12, 13 or 15(d) of the  Securities
Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
confirmed by a court.

                                            YES      X        No              
                                                   -----           -----

As of October 13, 1998,  12,240,865 shares of the registrant's common stock were
outstanding .



<PAGE>  2


                         PHAR-MOR, INC. AND SUBSIDIARIES

                                    FORM 10-Q

                    FOR THE QUARTER ENDED SEPTEMBER 26, 1998



                                    I N D E X
 

                                                                            Page

Part I:  Financial Information

         Item 1.  Financial Statements

              Condensed  Consolidated  Balance  Sheets as of September  26,
              1998 and June 27, 1998                                          3

              Condensed  Consolidated  Statements  of  Operations  for  the
              Thirteen  Weeks Ended  September  26, 1998 and  September 27,
              1997                                                            4

              Condensed  Consolidated  Statements of Comprehensive Loss for
              the Thirteen Weeks Ended September 26, 1998 and September 27,
              1997                                                            5

              Condensed  Consolidated  Statements  of  Cash  Flows  for the
              Thirteen  Weeks Ended  September  26, 1998 and  September 27,
              1997                                                            6

              Notes to Condensed Consolidated Financial Statements            7

         Item  2.   Management's   Discussion  and  Analysis  of  Financial
         Condition and Results of Operations                                  9

Part II: Other Information

         Item 1.  Legal Proceedings                                          12

         Item 2.  Changes in Securities                                      12

         Item 3.  Defaults Upon Senior Securities                            12

         Item 4.  Submission of Matters to a Vote of Security Holders        12

         Item 5.  Other Information                                          12

         Item 6.  Exhibits and Reports on Form 8-K                           13

         Signatures                                                          14

         Exhibit Index                                                       15


<PAGE>  3


                         PHAR-MOR, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (In thousands)
<TABLE>
<CAPTION>

ASSETS                                                         (Unaudited)  
                                                              September 26,      June 27,
                                                                   1998            1998
                                                            ---------------     ------------

<S>                                                               <C>          <C>
Current assets:
 Cash and cash equivalents                                        $  23,927    $  44,655
 Marketable securities                                                6,602        9,065
 Accounts receivable - net                                           22,954       20,927
 Merchandise inventories                                            175,801      176,069
 Prepaid expenses and other current assets                            2,044        2,703
                                                                  ---------    ---------         
      Total current assets                                          231,328      253,419

Property and equipment - net                                         79,573       75,512
Deferred tax asset                                                    9,281        9,281
Investments                                                           4,526        4,275
Investment in Avatex                                                  2,217        3,525
Other assets                                                          3,012        3,443
                                                                  ---------    ---------   

      Total assets                                                $ 329,937    $ 349,455
                                                                  =========    =========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
 Accounts payable                                                 $  59,988    $  67,091
 Accrued expenses and other current liabilities                      32,859       39,316
 Current portion of long-term debt and capital lease obligations     10,311       10,327
                                                                  ---------    ---------   
      Total current liabilities                                     103,158      116,734

Long-term debt and capital lease obligations                        128,425      130,993
Long-term self insurance reserves                                     7,900        7,680
Deferred rent and unfavorable lease liability - net                  11,085       11,074
                                                                  ---------    ---------   
      Total liabilities                                             250,568      266,481
                                                                  ---------    ---------  

Commitments and contingencies

Minority interests                                                      535          535
                                                                  ---------    --------- 

Stockholders' equity:
 Preferred stock                                                       --           --
 Common stock                                                           122          122
 Additional paid-in capital                                          90,007       89,976
 Stock options outstanding                                            1,585        1,401
 Unrealized loss on investment in Avatex                             (2,783)        (475)
 Retained deficit                                                   (10,097)      (8,585)
                                                                  ---------    ---------  
      Total stockholders' equity                                     78,834       82,439
                                                                  ---------    ---------  

      Total liabilities and stockholders' equity                  $ 329,937    $ 349,455
                                                                  =========    =========
</TABLE>

         The  accompanying  notes  are  an  integral  part  of  these  condensed
         consolidated financial statements.


<PAGE>  4



                         PHAR-MOR, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                (Dollars in thousands, except per share amounts)
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                      Thirteen                  Thirteen
                                                                    Weeks Ended               Weeks Ended
                                                                 September 26, 1998        September 27, 1997
                                                               --------------------      --------------------
<S>                                                            <C>                       <C>                 
Sales                                                          $            269,412      $            256,332

Less:
 Cost of goods sold, including occupancy and
    distribution costs                                                      218,597                   208,202
 Selling, general and administrative expenses                                42,524                    41,832
 Chief Executive Officer severance expenses                                    --                       5,433
 Depreciation and amortization                                                5,675                     5,338
                                                               --------------------      --------------------

Income (loss) from operations before interest expense,
 interest income, investment loss and income taxes                            2,616                    (4,473)


Interest expense                                                             (3,991)                   (4,205)
Interest income                                                                 488                     1,107
Investment loss                                                                (625)                     --
                                                               --------------------      --------------------

Loss before income taxes                                                     (1,512)                   (7,571)

Income taxes                                                                   --                        --
                                                               --------------------      --------------------

Net loss                                                       $             (1,512)     $             (7,571)
                                                               ====================      ====================

Basic and diluted loss per common share                        $               (.12)     $               (.62)
                                                               ====================      ====================

Weighted average number of basic and diluted common shares
 outstanding                                                             12,239,821                12,159,199
</TABLE>


         The  accompanying  notes  are  an  integral  part  of  these  condensed
         consolidated financial statements.


<PAGE>  5



                         PHAR-MOR, INC. AND SUBSIDIARIES
             CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
                                 (In thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                          Thirteen                 Thirteen
                                                        Weeks Ended              Weeks Ended
                                                     September 26, 1998       September 27, 1997
                                                    -------------------      -------------------
<S>                                                 <C>                      <C>                 
Net loss                                            $            (1,512)     $            (7,571)

Other comprehensive loss:
Unrealized loss on securities:
Unrealized holding loss on investment in Avatex
arising during period                                            (2,308)                    --
                                                    -------------------      -------------------
Comprehensive loss                                  $            (3,820)     $            (7,571)
                                                    ===================      ===================
</TABLE>


         The  accompanying  notes  are  an  integral  part  of  these  condensed
         consolidated financial statements.


<PAGE>  6


                         PHAR-MOR, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                Thirteen                 Thirteen
                                                              Weeks Ended              Weeks Ended
                                                           September 26, 1998       September 27, 1997
                                                          -------------------      -------------------
OPERATING ACTIVITIES
<S>                                                       <C>                      <C>                 
 Net loss                                                 $            (1,512)     $            (7,571)
 Adjustments to reconcile net loss to net
 cash used for operating activities:
 Items not requiring the outlay of cash:
  Depreciation                                                          3,682                    3,367
  Amortization of video rental tapes                                    1,981                    1,971
  Stock option expense                                                    183                     --
  Amortization of deferred financing costs and goodwill                   105                      105
  Deferred rent                                                            11                      728
 Changes in assets and liabilities:
  Accounts receivable                                                  (2,027)                   1,193
  Marketable securities                                                 2,463                     --
  Merchandise inventories                                                 137                  (20,630)
  Prepaid expenses                                                        659                      667
  Other assets                                                            326                     (108)
  Accounts payable                                                     (7,103)                   9,594
  Accrued expenses and other current liabilities                       (6,236)                  (5,054)
                                                          -------------------      -------------------
 Net cash used for operating activities                                (7,331)                 (15,738)
                                                          -------------------      -------------------

INVESTING ACTIVITIES
 Additions to rental videotapes                                        (1,850)                  (2,063)
 Additions to property and equipment                                   (7,743)                  (4,493)
 Investment in Avatex                                                  (1,000)                    --
 Investment in equity securities                                         (251)                    --
                                                          -------------------      -------------------
 Net cash used for investing activities                               (10,844)                  (6,556)
                                                          -------------------      -------------------

FINANCING ACTIVITIES
 Principal payments on long-term debt                                    (977)                    (547)
 Principal payments on capital lease obligations                       (1,607)                  (1,581)
 Issuance of common stock                                                  31                     --
                                                          -------------------      -------------------
 Net cash used for financing activities                                (2,553)                  (2,128)
                                                          -------------------      -------------------

 Decrease in cash and cash equivalents                                (20,728)                 (24,422)
 Cash and cash equivalents, beginning of period                        44,655                   79,847
                                                          -------------------      -------------------
 Cash and cash equivalents, end of period                 $            23,927      $            55,425
                                                          ===================      ===================

</TABLE>



         The  accompanying  notes  are  an  integral  part  of  these  condensed
         consolidated financial statements.


<PAGE>  7


PHAR-MOR, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
--------------------------------------------------------------------------------

1.       BASIS OF PRESENTATION
         The accompanying  unaudited  interim condensed  consolidated  financial
         statements  have been prepared in accordance  with  generally  accepted
         accounting  principles for interim financial  information.  They do not
         include  all  information  and  footnotes  which  would be  required by
         generally  accepted   accounting   principles  for  complete  financial
         statements.  In the  opinion  of  management  of  Phar-Mor,  Inc.  (the
         "Company") and its  subsidiaries,  these interim  financial  statements
         contain all adjustments considered necessary for a fair presentation of
         financial position, results of operations,  comprehensive loss and cash
         flows  for  the  periods  presented.  Reference  should  be made to the
         Company's Annual Report on Form 10-K for the fiscal year ended June 27,
         1998 for additional  disclosures,  including a summary of the Company's
         accounting  policies,  which have not  changed,  except as discussed in
         Note 3. Operating  results for the thirteen  weeks ended  September 26,
         1998 are not necessarily indicative of the results that may be expected
         for the fifty-three weeks ending July 3, 1999.

2.       CHIEF EXECUTIVE OFFICER RESIGNATION
         On September 19, 1997,  Robert Haft and Avatex  Corporation  ("Avatex")
         finalized  an  agreement   regarding  Hamilton  Morgan  LLC  ("Hamilton
         Morgan"), (the "Hamilton Morgan Agreement").  In exchange for 3,750,000
         shares of the Company's stock and the return of a voting proxy on other
         Company  shares,  Hamilton Morgan redeemed the 69.8% Avatex interest in
         Hamilton  Morgan,   repaid  certain  indebtedness  and  received  other
         consideration.   Avatex   beneficially  owns  39.1%  of  the  Company's
         outstanding  common  stock.  In  conjunction  with the Hamilton  Morgan
         Agreement,  the Company entered into a Severance  Agreement with Robert
         Haft  whereby he resigned his  positions  as Chairman of the  Company's
         Board of Directors and as the  Company's  Chief  Executive  Officer and
         received  a lump sum cash  payment  of  $4,417.  Under the terms of the
         Severance  Agreement,  the Company will continue to provide benefits to
         him through  September 19, 2000. He is indemnified  and entitled to tax
         reimbursement  in  respect  to  any  payments  that  constitute  excess
         parachute  payments  under  Federal  Income Tax laws.  The  Company has
         provided  a letter of credit in the amount of  approximately  $2,900 to
         secure its contractual obligations under the Severance Agreement.

3.       NEW ACCOUNTING PRONOUNCEMENTS
         In June 1997, the Financial Accounting Standards Board issued Statement
         of  Financial   Accounting   Standard   ("SFAS")  No.  130   "Reporting
         Comprehensive Income." SFAS No. 130 establishes standards for reporting
         comprehensive  income  and its  components,  some of  which  have  been
         historically  excluded from the  Statement of  Operations  and recorded
         directly to the equity  section of an entities  statement  of financial
         position.  SFAS No. 130 also  requires that the  cumulative  balance of
         these items of other comprehensive  income are reported separately from
         retained earnings and additional  paid-in capital in the equity section
         of a statement of financial  position.  This statement is effective for
         fiscal years beginning after December 15, 1997. The Company has adopted
         SFAS No. 130 in the quarter ended September 26, 1998 and has elected to
         include  the  required  items  of  other  comprehensive  income  in its
         Condensed Consolidated Statements of Comprehensive Loss.

4.       LITIGATION
         The Company and its  subsidiaries  are  involved in legal  proceedings,
         claims and litigation  arising in the ordinary  course of business.  In
         the  opinion  of   management,   the  outcome  of  such  current  legal
         proceedings,  claims and litigation  will not have a material impact of
         the Company's consolidated financial position.


<PAGE>  8

PHAR-MOR, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
--------------------------------------------------------------------------------

5.       INVESTMENT IN AVATEX
         During the quarter  ended  September  26,  1998,  the Company  invested
         $1,000 to purchase  approximately 3.4% of Avatex common stock, bringing
         its total investment in Avatex to approximately 15.1% of Avatex's total
         outstanding common stock. This investment is carried at market value as
         available-for-sale  securities.  Unrealized  losses on these securities
         are excluded from net loss but are included as a comprehensive  loss in
         the  Condensed  Consolidated  Statements of  Comprehensive  Loss. As of
         September 26, 1998,  the quoted market price of Avatex common stock was
         $1.0625 per share as compared to $2.1875 per share at June 27, 1998.


<PAGE>  9


PHAR-MOR, INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS



RESULTS OF OPERATIONS (all dollar amounts in thousands)

Thirteen Weeks Ended September 26, 1998 versus
    Thirteen Weeks Ended September 27, 1997

Sales for the first quarter of fiscal year 1999 ("Fiscal  1999")  increased 5.1%
compared to the first  quarter of fiscal year 1998 ("Fiscal  1998").  Comparable
store sales  increased 4.1% from $253,708 for Fiscal 1998 to $264,040 for Fiscal
1999. The increase in comparable  store sales was primarily due to the continued
success of the "Super  Phar-Mor"  store  remodel  program.  Sales for the eleven
stores which were remodeled into the "Super  Phar-Mor" format between the end of
the first  quarter of fiscal year 1998 and the beginning of the first quarter of
fiscal year 1999  increased 17% in the thirteen  weeks ended  September 26, 1998
over the comparable period in the prior year.

Cost of sales as a  percentage  of sales was 81.1% in Fiscal  1999  compared  to
81.2% in Fiscal 1998, a 0.1%  decrease.  This decrease is primarily due to lower
inventory shrinkage partially offset by higher promotional expense.

Selling, general and administrative expenses as a percentage of sales were 15.8%
in Fiscal 1999 compared to 16.3% in Fiscal 1998.  This decrease was due to lower
advertising  expenses and  pre-opening  costs  partially  offset by higher store
wages and corporate travel expenses.

In Fiscal 1998 the Company  incurred  $5,433 in executive  severance and related
costs  associated with the  resignation of the Company's  former Chairman of the
Board and Chief Executive Officer.

Depreciation  and  amortization  expense was $5,675 in Fiscal  1999  compared to
$5,338 in Fiscal  1998,  an  increase  of $337.  The  increase  is the result of
depreciation  on capital  expenditures  made  since the first  quarter of Fiscal
1998.

Interest income was $488 in Fiscal 1999 compared to interest income of $1,107 in
Fiscal  1998,  a $619  decrease.  The  decrease in interest  income was due to a
decrease in the amount of excess funds available for investment in Fiscal 1999.

FINANCIAL CONDITION AND LIQUIDITY (all dollar amounts in thousands)

The Company's cash position as of September 27, 1997 was $23,927.  The Company's
cash  position may fluctuate as a result of seasonal  merchandise  purchases and
timing of payments.

On September 11, 1995, the Company  entered into the Revolving  Credit  Facility
(the "Facility") with BankAmerica Business Credit, Inc. ("BABC"),  as agent, and
other financial institutions  (collectively,  the "Lenders"), that established a
credit facility in the maximum amount of $100,000.

Borrowings  under the  Facility  was  available  for working  capital  needs and
general  corporate  purposes.  Up to  $50,000 of the  Facility  at any time were
available for standby and documentary  letters of credit.  The Facility included
restrictions  on, among other things,  additional  debt,  capital  expenditures,
investments,   restricted   payments  and  other   distributions,   mergers  and
acquisitions,  and contained covenants requiring the Company to meet a specified
quarterly  minimum EBITDA Coverage Ratio (the sum of earnings  before  interest,
taxes, depreciation and amortization,  as defined, divided by interest expense),
calculated  on a rolling four  quarter  basis,  and a monthly  minimum net worth
test.

<PAGE> 10

Credit  availability  under  the  Facility  at any  time was the  lesser  of the
Aggregate  Availability  (as defined in the Facility) or $100,000.  The Facility
established a first priority lien and security interest in the current assets of
the  Company,  including,  among other  items,  cash,  accounts  receivable  and
inventory.

Advances made under the Facility would have borne interest at the BABC reference
rate plus 1/2% or London  Interbank  Offered Rate  ("LIBOR") plus the applicable
margin.  The applicable margin ranged between 1.50% and 2.00% and was determined
by a formula based on a ratio of (a) the  Company's  earnings  before  interest,
taxes,  depreciation  and  amortization to (b) interest.  Under the terms of the
Facility, the Company was required to pay a commitment fee of 0.28125% per annum
on the unused  portion of the Facility,  letter of credit fees and certain other
fees.

There have been no borrowings under the Facility.

The Company entered into an Amended and Restated  Revolving Credit Facility (the
"Amended Facility")  effective September 10, 1998 with BABC, as agent, and other
financial  institutions that establishes a credit facility in the maximum amount
of $100,000.

Borrowings  under the Amended Facility may be used for working capital needs and
general  corporate  purposes.  Up to $50,000 of the Amended Facility at any time
may be used for standby and documentary  letters of credit. The Amended Facility
includes  restrictions  on, among other things,  additional  debt,  investments,
dividends  and other  distributions,  mergers and  acquisitions  and contains no
financial covenants.

Credit  availability under the Amended Facility at any time is the lesser of the
aggregate  availability  (as defined in the Amended  Facility) or $100,000.  The
Amended Facility  establishes a first priority lien and security interest in the
current  assets of the Company,  including,  among other items,  cash,  accounts
receivable and inventory.

Advances  made under the  Amended  Facility  bear  interest  at the  BankAmerica
reference  rate plus 1/2% or LIBOR plus  2.00%.  Under the terms of the  Amended
Facility,  the Company is required to pay a commitment  fee of between 0.25% and
0.35% per annum on the unused portion of the facility, letter of credit fees and
certain other fees.

There have been no borrowings under the Amended  Facility.  Unused  availability
under the Amended  Facility,  after  subtracting  amounts  used for  outstanding
letters of credit, was $76,530 at September 26, 1998.

The Amended Facility expires on September 10, 2001.

Thirteen weeks ended September 26, 1998

During the thirteen weeks ended  September 26, 1998, the Company's cash position
decreased by $20,728.  Net cash used by  operating  activities  was $7,331.  The
major uses of cash from  operating  activities  were for a decrease  in accounts
payable of $7,103 and a decrease in accrued expenses of $6,236.

Capital expenditures of $7,743, additions to video rental tapes of $1,850 and an
additional  $1,000  investment in Avatex were paid for with the Company's excess
cash position.

Net cash used for financing activities of $2,553 consisted of principal payments
on lease  obligations of $1,607 and principal  payments on term debt of $977 net
of proceeds of $31 from the exercise of stock options.

The  Company  is  exposed to certain  market  risks from  transactions  that are
entered into during the normal course of business. The Company's policies do not
permit active trading of, or speculation in, derivative  financial  instruments.
The Company's  primary  market risk exposure  relates to interest rate risk. The
Company manages its interest rate risk in order to balance its exposure  between
fixed and variable rates while attempting to minimize its interest costs.


<PAGE> 11 


Trends,  Demands,  Commitments,  Events or Uncertainties  (all dollar amounts in
thousands)

Certain  Company  information  systems have  potential  operational  problems in
connection  with  applications  that  contain  a date  and/or  use a  date  in a
comparative  manner as the date  transitions into the Year 2000. The Company has
implemented a comprehensive program to identify and remediate potential problems
related to the Year 2000 in its information systems,  infrastructure,  logistics
and  retail   facilities.   In  addition,   the  Company  has  initiated  formal
communication with all of its significant  vendors and other external interfaces
to determine the extent to which the Company is  vulnerable  to a  third-party's
failure to remediate their own potential  problems related to the Year 2000. The
inability of the Company or significant  vendors and/or  external  interfaces of
the Company to adequately address Year 2000 issues could cause disruption of the
Company's systems.

Management  believes,  based on its  assessment of all of its systems,  that its
purchasing  and  pharmacy  systems  pose the  greatest  risk of  disrupting  its
business if Year 2000 system  modifications  are not completed in time.  Without
modification, the Company may not be able to issue purchase orders with delivery
dates  after  December  31,  1999 or dispense  prescriptions  with refill  dates
extending  beyond  December  31,  1999.  The Company has  developed or is in the
process of developing contingency plans that include manually performing work in
place of affected systems and the renting of back-up systems and generators.

Many of the Company's  systems are Year 2000  compliant,  or have been scheduled
for  replacement in the Company's  on-going  systems plans.  As of September 26,
1998, the Company has incurred  approximately $450 related to the assessment of,
and  preliminary   efforts  in  connection  with,  its  Year  2000  program  and
remediation  plan.  Future  spending  for  software  modifications  and  testing
required for Year 2000  compliance are currently  estimated to be  approximately
$600 with the majority  expected to be incurred by the end of Fiscal  1999.  The
Company  will  accelerate  by one year the purchase of  approximately  $5,000 in
replacement  hardware  in order to  ensure  the  associated  system is Year 2000
compliant.  The Company's target date for completing its Year 2000 modifications
is April 30, 1999,  including additional testing and refinements to identify the
systems planned for 1999. These expenditures are not expected to have a material
impact on the Company's operating results, liquidity and capital resources.

In June 1997, the Financial Accounting Standards Board ("FASB") issued Statement
of Accounting  Standard ("SFAS") No. 131,  "Disclosures  about an Enterprise and
Related   Information,"  in  February  1998,  the  FASB  issued  SFAS  No.  132,
"Employer's Disclosures about Pensions and Other Postretirement Benefits" and in
June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative  Instruments
and Hedging  Activities."  Management  does not  believe the  adoption of any of
these standards will have a material effect on its financial position or results
of operations.


<PAGE> 12 


PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         None.

ITEM 2.  CHANGES IN SECURITIES

         None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         None.

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

         None.

ITEM 5.  OTHER INFORMATION

         None.



<PAGE> 13


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)      Exhibits

                  See Exhibit Index on page 15.

         (b)      Reports on Form 8-K

                  The  following  reports  on  Form  8-K  were  filed  with  the
                  Securities  and Exchange  Commission  during the quarter ended
                  September 26, 1998

                  None.




<PAGE> 14



                                   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.




                                       PHAR-MOR, INC.


Date:  October 27, 1998                By:   /s/ Sankar Krishnan             
                                            ------------------------------------
                                                Sankar Krishnan
                                                Senior Vice President and Chief 
                                                  Financial Officer



Date:  October 27, 1998                By:   /s/ John R. Ficarro               
                                           -------------------------------------
                                                John R. Ficarro
                                                Senior Vice President and Chief
                                                  Administrative Officer


<PAGE> 15



                                 PHAR-MOR, INC.

                                INDEX TO EXHIBITS


Exhibit No.

*3.1                       Amended and Restated Articles of Incorporation

**3.2                      Amended and Restated By-laws

*4.1                       Indenture dated September 11, 1995 between  Phar-Mor,
                           Inc. and IBJ Schroder Bank & Trust Company

*4.2                       Warrant  Agreement  dated  September 11, 1995 between
                           Phar-Mor, Inc. and Society National Bank

10.1                       Loan and  Security  Agreement,  dated as of September
                           10,  1998,  by and among the  financial  institutions
                           listed on the signature  pages  therein,  BankAmerica
                           Business Credit, Inc., as agent, and Phar-Mor,  Inc.,
                           Phar-Mor,  Inc.,  LLC,  Phar-Mor of  Delaware,  Inc.,
                           Phar-Mor of Florida,  Inc.,  Phar-Mor of Ohio,  Inc.,
                           Phar-Mor  of   Virginia,   Inc.,   and   Phar-Mor  of
                           Wisconsin, Inc.

27                         Financial Data Schedule
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*        Previously  filed in connection  with the filing of Phar-Mor's Form 10,
         on October 23, 1995

**       Previously filed in connection with the filing of Phar-Mor's  quarterly
         report on Form 10-Q, on May 1, 1998