Ayres encountered several challenges in establishing and operating the new discount store concept. First, Ayres needed to define a clear brand identity for the new subsidiary and its relationship to the L. S. Ayres store brand. Second, errors in selection of store locations posed challenges. Ayres built discount stores in areas of economic decline or in locations that were not yet sufficiently developed. Finally, Ayres's efforts to establish supermarkets adjacent to its discount stores proved unsuccessful. In fiscal year 1970, two years after their initial introduction, the Ayr-Way food stores, leased and operated by Scot-Lad Foods of Chicago, caused Ayres an after-tax loss of $320,000. Ayres sold its food stores to Scot-Lad Foods in 1970 and concentrated on Ayr-Way's general merchandise.