SecProbe.io

<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>
                    [LETTERHEAD OF AMERICAN CONSUMERS, INC.]

March 8, 2005

Mr. George F. Ohsiek, Jr.
Branch Chief
U.S. Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549

     RE:  American Consumers, Inc.
          Form 10-K for the fiscal year ended May 29, 2004
          Filed August 26, 2004
          File No. 0-05815
          Forms 10-Q for the periods ended August 28, 2004 and November 27, 2004
          Via EDGAR Filing System

Dear Mr. Ohsiek:

     In reference to your comment letter of February 4, 2005 and with respect to
your examination of the Form 10-K for the year ended May 29, 2004, and Forms
10-Q for the quarters ended August 28, 2004 and November 27, 2004 of American
Consumers, Inc. ("ACI"), this letter sets forth our response to each comment,
numbered to correspond to the Staff's letter:

Form 10-K For The Fiscal Year Ended May 29, 2004
------------------------------------------------

General
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1.   WHERE A COMMENT BELOW REQUESTS ADDITIONAL DISCLOSURES OR OTHER REVISIONS TO
     BE MADE, THESE REVISIONS SHOULD BE INCLUDED IN YOUR FUTURE FILINGS, AS
     APPLICABLE.

ACI Response:  We acknowledge that, where a comment requests additional
-------------
disclosures or other revisions to be made, these revisions will be included in
ACI's future filings, as applicable.

Exhibit  13
-----------

Management's  Discussion  and  Analysis  of  Financial  Condition and Results of
--------------------------------------------------------------------------------
Operations
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Results  of  Operations,  page  5
---------------------------------

2.   PLEASE REVISE THIS SECTION TO ENSURE YOU DISCUSS YOUR RESULTS OF OPERATIONS
     FOR EACH PERIOD FOR WHICH FINANCIAL STATEMENTS ARE PRESENTED. FOR EXAMPLE,
     YOU CURRENTLY ONLY DISCUSS THE CHANGES IN NET INCOME/LOSS AND NET SALES
     BETWEEN FISCAL YEARS 2003 AND 2004. YOU SHOULD ALSO DISCUSS SIGNIFICANT
     CHANGES IN THESE AND OTHER LINE ITEMS BETWEEN FISCAL YEARS 2002 AND 2003.

<PAGE>
ACI Response:  We acknowledge your comment and affirm that, in future filings,
-------------
ACI's discussion of Results of Operations in Management's Discussion and
Analysis of Financial Condition and Results of Operations will discuss the
Company's results of operations for each period for which financial statements
are presented.

3.   PLEASE REVISE YOUR INCOME TAX DISCUSSION TO DISCUSS SIGNIFICANT CHANGES IN
     YOUR DEFERRED TAX VALUATION ALLOWANCE. IN THIS REGARD, WE NOTE THAT IN
     FISCAL YEARS 2003 AND 2004, YOUR NET DEFERRED TAXES ARE FULLY VALUED.
     PLEASE DISCUSS WHAT THIS MEANS IN TERMS OF YOUR EXPECTATIONS OF FUTURE BOOK
     AND TAXABLE INCOME.

ACI Response:  The significant changes in the deferred tax valuation allowance
-------------
are a result of recurring net losses by ACI over recent fiscal years.  In
accordance with SFAS 109, a full valuation has been placed on the Company's net
deferred tax assets (primarily NOL carryforwards) as a result of these continued
losses.  This valuation allowance will be continued until such time as the
likelihood of realization is reasonably assured.  We acknowledge your comment
and, in response, will include expanded disclosure in the Results of Operations
discussion (to the extent material) in applicable future filings regarding ACI's
deferred tax valuation allowance and what this means in terms of expectations of
future book and taxable income.

We  anticipate that the expanded discussion in future filings will be similar to
the  following:

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

     The Company accounts for income taxes in accordance with the provisions of
     SFAS No. 109 Accounting for Income Taxes (SFAS No. 109), which requires
     that deferred income taxes be determined based on the estimated future tax
     effects of differences between the financial statement and tax bases of
     assets and liabilities given the provisions of the enacted tax laws.
     Valuation allowances are used to reduce deferred tax assets to the amount
     considered likely to be realized. The components of income tax and the
     deferred tax assets and liabilities are detailed in Note 5 of the Company's
     financial statements.

     At May xx, 200x, the Company had net operating loss carryforwards for
     federal and state income tax purposes of $xxx,xxx and $xxx,xxx,
     respectively, arising from losses incurred by the Company during 200x and
     200x. These net operating loss carryforwards may be utilized to offset
     future taxable income. In accordance with SFAS No. 109, the Company has
     established a full valuation allowance, which effectively reduces the
     carrying value of its net deferred taxes to zero at May xx, 200x and May
     xx, 200x. The net change in valuation allowance for the year ended May xx,
     200x resulted in an increase of $x,xxx. Unless the Company realizes
     sufficient taxable income in future periods to demonstrate that the
     likelihood of realization of the net deferred tax assets is reasonably
     assured under the accounting guidelines of SFAS No. 109, this valuation
     allowance will be continued in future periods. If not utilized, the
     carryforwards will expire at various dates between 2022 and 2024.

4.   WHERE YOU DESCRIBE TWO OR MORE BUSINESS REASONS THAT CONTRIBUTED TO A
     MATERIAL CHANGE IN A FINANCIAL STATEMENT LINE ITEM BETWEEN PERIODS, PLEASE
     QUANTIFY THE EXTENT TO WHICH EACH CHANGE CONTRIBUTED TO THE OVERALL CHANGE
     IN THAT LINE ITEM, IF PRACTICAL. FOR EXAMPLE, WHERE YOU PROVIDE A LIST OF
     THE CONTRIBUTING FACTORS TO YOUR INCREASE IN

<PAGE>
     GENERAL AND ADMINISTRATIVE EXPENSES WHEN COMPARING FISCAL YEAR 2004 TO
     FISCAL YEAR 2003, QUANTIFICATION OF INDIVIDUAL IMPACTS SHOULD BE PROVIDED.
     SEE ITEM 303(A) OF REGULATION S-K AND FINANCIAL REPORTING CODIFICATION
     501.04.

ACI Response:  We acknowledge your comment and affirm that, in future filings,
-------------
where ACI's discussion of Results of Operations in Management's Discussion and
Analysis of Financial Condition and Results of Operations describes two or more
business reasons that contributed to a material change in a financial statement
line item between periods, our disclosure will be expanded to quantify the
extent to which each change contributed to the overall change in that line item,
if practical.

5.   WHERE YOU IDENTIFY INTERMEDIATE CAUSES OF CHANGES IN YOUR OPERATING
     RESULTS, ALSO DESCRIBE THE REASONS UNDERLYING THE INTERMEDIATE CAUSES. FOR
     EXAMPLE, YOU INDICATE THAT SALES INCREASED IN FISCAL YEAR 2004 DUE TO THE
     OPENING OF A NEW STORE, PARTIALLY OFFSET BY A DECREASE IN SAME STORE SALES.
     YOU SHOULD ELABORATE TO EXPLAIN WHY SAME STORES SALES ARE DECREASING.
     ADDITIONALLY, YOU SHOULD INDICATE WHETHER YOU EXPECT SAME STORE SALES TO
     CONTINUE TO DECLINE IN FUTURE PERIODS. SEE SEC RELEASE NO. 33-8350.

ACI Response:  We acknowledge your comment and affirm that, in future filings,
-------------
where ACI's discussion of Results of Operations in Management's Discussion and
Analysis of Financial Condition and Results of Operations identifies
intermediate causes of changes in the Company's operating results, we will
expand the discussion to also describe the reasons underlying the intermediate
causes, to the extent that management believes that one or more such underlying
causes can be accurately identified and described in a manner that is meaningful
in the context of the overall discussion.  With respect to the decrease in same
store sales referenced in your comment, we note that both the Description of
Business and the Management's Discussion and Analysis sections in ACI's annual
report contain a general discussion of the ongoing competitive pressures on the
Company, which we believe are responsible for the decrease in same store sales.
Results often fluctuate from period to period, and prior experience has
demonstrated that we are not necessarily able to predict with any degree of
accuracy whether same store sales will continue to decline in future periods.
Nevertheless, in response to your comment, we will revise the Results of
Operations discussion in future filings, as applicable, to more clearly state
the relationship between the ongoing effects of competitive conditions on ACI's
business and historical facts such as the same-store sales decline noted in your
comment.  To the extent that we believe we can do so in a manner that provides
investors with meaningful additional information, we also will state whether
management believes that such information points toward any trend that may be
expected to continue in future periods.

Liquidity  and  Capital  Resources,  page  6
--------------------------------------------

6.   PLEASE REVISE TO DISCUSS MATERIAL CHANGES BETWEEN PERIODS IN YOUR CASH
     FLOWS FROM OPERATING, INVESTING, AND FINANCING ACTIVITIES. IN THIS REGARD,
     BASED ON REVIEWING YOUR STATEMENTS OF CASH FLOWS, WE NOTE THAT CASH FLOWS
     FROM OPERATING ACTIVITIES DECREASED SIGNIFICANTLY BETWEEN 2003 AND 2004,
     LARGELY DUE TO INCREASED INVENTORIES. WE BELIEVE THIS TYPE OF ACTIVITY THAT
     SIGNIFICANTLY IMPACTS YOUR CASH FLOWS SHOULD BE DISCUSSED AND EXPLAINED.

<PAGE>
ACI Response:  We acknowledge your comment and affirm that, in future filings,
------------
we will revise the Company's discussion of Liquidity and Capital Resources in
Management's Discussion and Analysis of Financial Condition and Results of
Operations to discuss material changes between periods in ACI's cash flows from
operating, investing, and financing activities.  In particular, we will focus
the discussion around the material issues creating material changes in
operating, investing and financing activities.  An illustrative example of such
additional language is as follows:

     Changes in the Company's liquidity and capital resources are primarily a
     result of the following: During fiscal year 2004, the Company was required
     to increase its draws under its line of credit with Northwest Georgia Bank
     by $100,100 and to borrow an additional $350,000 under a note payable to
     Northwest Georgia Bank. Further, the Company's cash and cash equivalents
     declined by $410,524 during the fiscal year ended May 29, 2004. These
     additional borrowings and the decline in cash and cash equivalents were
     principally the result of three major factors. The first of these factors
     was the Company's net loss of $236,050 for the year ended May 29, 2004.
     However, this loss was offset by $300,212 in depreciation expense taken
     during the year. The second factor was expenditures related to the opening
     of the Company's eighth grocery store location during fiscal year 2004.
     This store opening necessitated the purchase of significant additional
     inventories. At May 29, 2004, inventory related to this location was
     approximately $280,000, while the aggregate increase in inventories for the
     other seven store locations in fiscal 2004 over fiscal 2003 was
     approximately $86,000. Further, the Company had to make significant fixed
     asset purchases of approximately $300,000 to get this eighth store location
     up and running in good operational condition. (Other fixed asset purchases
     during fiscal 2004 totaled approximately $40,000 for the other seven
     locations.) The final factor was the Company's repayment of long-term debt
     during fiscal 2004 in the aggregate amount of approximately $200,000.

Material  Commitments,  page  7
-------------------------------

7.   WE  NOTE  YOUR  DISCLOSURE  THAT  CAPITAL  EXPENDITURES ARE NOT EXPECTED TO
     EXCEED $200,000 FOR THE FISCAL YEAR. PLEASE ELABORATE ON YOUR DISCLOSURE TO
     DESCRIBE  THE  NATURE  AND  GENERAL  PURPOSE  OF  THE  EXPECTED  CAPITAL
     EXPENDITURES  AND  THE  ANTICIPATED SOURCE OF FUNDS FOR THESE EXPENDITURES.
     REFER  TO  ITEM  303(A)(2)  OF  REGULATION  S-K.

ACI Response:  We acknowledge your comment and affirm that, in future filings,
-------------
we will elaborate on our disclosure concerning the Company's planned capital
expenditures to describe the nature and general purpose of the expected capital
expenditures and the anticipated source of funds for these expenditures.
Specifically, such disclosure will reflect the fact that, for the current fiscal
year, our estimate of $200,000 in capital expenditures is based on the amount
that we expect to spend during the year for equipment that fails and must be
replaced during the course of the year (such estimate being based on ACI's
historical experience).  Apart from these ordinary course replacements, there
are no capital expenditures budgeted for the current fiscal year.  We also will
disclose that, in accordance with ACI's prior practice, we expect to fund these
capital expenditures from a combination of funds generated by operations and, to
the extent necessary, additional borrowings under our bank line of credit.

<PAGE>
Financial  Statements
---------------------

Statements  of  Changes  in  Stockholders'  Equity,  page  14
-------------------------------------------------------------

8.   PLEASE INCLUDE A COLUMN THAT RECONCILES THE CHANGES IN THE NUMBER OF SHARES
     OF COMMON STOCK ISSUED BETWEEN YEARS. SEE PARAGRAPH 10 OF APB 12.

ACI Response:  We acknowledge your comment and affirm that, in future filings,
-------------
we will include a column in the Statements of Changes in Stockholders' Equity
that reconciles the changes in the number of shares of common stock issued
between years.

Notes  to  Financial  Statements
--------------------------------

General
-------

9.   PLEASE DISCLOSE THE NATURE OF THE AMOUNTS INCLUDED IN OTHER (NON-OPERATING)
     INCOME. YOUR TABULAR DISCLOSURE ON PAGE 6 OF MD&A IS NOT SUFFICIENT IN THIS
     REGARD TO THE EXTENT THE "OTHER" LINE ITEM IN THE TABLE REPRESENTS OVER 70%
     OF TOTAL OTHER INCOME. SHOW US SUPPLEMENTALLY HOW THE REVISED DISCLOSURE
     WILL READ.

ACI Response:  We acknowledge your comment and, in future filings, we will
-------------
expand the "other income" line item of the tabular disclosure in the MD&A to
fully describe the significant components of the amounts involved for each
reporting period.  The items comprising other income primarily include fees from
money orders, check cashing fees and returned check fees.  We anticipate that
the expanded disclosure will read similarly to the following (2004 breakdown
shown; 3 years of comparative data will be disclosed in the filing):

<TABLE>
<CAPTION>
<S>                                  <C>
      Vendor's compensation          $13,664
      Gain (loss) on sale of assets        -
      Interest income                 13,728
      Money orders                    15,870
      Check cashing fees              31,139
      Returned check fees             10,264
      Other                            5,421
                                     -------
         Totals                      $90,086
                                     =======
</TABLE>

As  a  further  clarification  in  response  to  your  comment, we note that the
vendor's  compensation  of $13,664 reflected above relates to income received by
ACI  from  the  States of Alabama and Georgia. The Company receives this revenue
for  the  collection  and  timely  remittance  of sales taxes to the Alabama and
Georgia and Departments of Revenue.

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

General
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10.  PLEASE DISCLOSE YOUR ACCOUNTING POLICY FOR CONSIDERATION RECEIVED FROM
     VENDORS IN CONNECTION WITH THE PURCHASE OR PROMOTION OF THE VENDORS'
     PRODUCTS, SUCH AS

<PAGE>
     REBATES, SLOTTING FEES AND CO-OPERATIVE ADVERTISING FEES. DISCLOSE THE
     STATEM