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Correspondence

 Sara Lee Corporation

 Three First National Plaza

 Chicago, Illinois 60602

 May 12, 2005

 Mr. Gary Newberry

 United States Securities and
Exchange Commission

 Division of Corporate Finance

 Washington,
D.C. 20549-0405

Re:
Sara Lee Corporation

 Form 10-K, Filed September 3, 2004

 Form 10-Q, Filed January 31, 2005

 File No. 1-03344

 Dear Mr. Newberry:

 I am writing in response to the letter (the Comment Letter) dated April 18, 2005 regarding
the review of the Sara Lee Corporation (the Corporation) Form 10-K, filed with the Securities and Exchange Commission (the Commission) on September 3, 2004 and the Form 10-Q filed with the Commission on January 31, 2005. The responses are set forth
below following the text of the paragraph of the Comment Letter to which each response relates.

 Form 10-K for the year ended July 2, 2004

 Item 7. – Management’s Discussion and Analysis of Financial Condition and Results of Operations

 Financial Review Overview, page 26

 Question 1: We note the disclosure of $119 million of cash received related to the sale of the European tobacco unit here and on page 31.

(a)
Tell us what influence, if any, you have regarding the resolution of any of the contingencies associated with the sale of tobacco unit.

(b)
Tell us what risks of the tobacco business have been fully transferred to the buyer and what risks of the tobacco business you have retained.

(c)
It appears that you determined that certain future payments related to your sale of the European tobacco business represent gain contingencies. Tell us why this item meets the
definition of a gain contingency under FAS 5, given the guidance under FAS 5 paragraph 2, and as clarified by ETIF 01-10, paragraph 16, that states that a gain contingency under FAS 5, paragraph 17, is a recovery of a loss not yet recognized in the
financial statements or an amount recovered in excess of a loss recognized in the financial statements.

 Response 1(a): The corporation has no ability to influence the resolution of any of the contingencies associated
with the sale of the Tobacco unit. As indicated on page 63 of Exhibit 13 to the 2004 Form 10-K, the receipt of any portion of the contingency depends upon whether tobacco continues to be a legal product in the Netherlands, Belgium and Germany. If
tobacco becomes an illegal product in any of these countries, the corporation receives no further cash proceeds. When the business was sold in 1999, substantially all of the revenues of this operation were derived from those three countries. There
are no other contingencies relating to the corporation’s receipt of these proceeds.

 Response 1(b): All of the risks of ownership of the business were transferred to the buyer at the sale date and the corporation retains none of the risks of the business. As part of the sale transaction, the
contingent proceeds were placed in an escrow account and they are distributed if tobacco continues to be a legal product in the countries noted above. If tobacco were declared an illegal product, the funds held in escrow would revert back to the
buyer. The corporation has never been a party to litigation related to its sale of the tobacco products produced by this business.

 Response 1(c): Paragraph 5 of Emerging Issues Task Force Issue 01-10, “Accounting for the Impact of the Terrorist Attacks of September 11, 2001” (EITF
01-10), indicates that

 “The Task Force observed that the
consensus reached on this Issue with regard to the classification of losses and costs incurred and related insurance or other recoveries are limited to the September 11 events and should not be applied by analogy in other cases.”

 Paragraph 16 of EITF 01-10 specifically relates to how insurance recoveries
of losses and costs incurred as a result of the September 11 events should be classified in the statement of operations and when those recoveries should be recognized. The transaction under consideration is unrelated to the events of September 11
and does not involve an insurance loss or recovery. Furthermore, the current text of Statement of Financial Accounting Standards No. 5, “Accounting for Contingencies” (SFAS No. 5) does not indicate that EITF 01-10 interprets SFAS No. 5
– rather EITF 01-10 is indicated to cover a related issue. The corporation believes that other authoritative guidance is more analogous to the transaction under consideration and supports the conclusions reached. The following points are
relevant in this regard:

1.
Paragraph 1 of SFAS No. 5 indicates that

 “For the purposes of this Statement, a contingency is defined as an existing condition, situation or set of circumstances involving uncertainty as to
possible gain (hereinafter a “gain contingency”) or loss (hereinafter a “loss contingency”).” Paragraph 82 of FASB Statement of Concepts 6 defines gains as “increases in equity (net assets) from peripheral or incidental
transactions of an entity and from all other transactions and other events and circumstances affecting the entity except those that result from revenues or investment by owners”. The term gain is not limited to situations in which there is a
recovery of a loss which has not yet been recognized in the financial statements or an amount recovered in excess of a loss recognized in the financial statements.

 2

 Paragraph 17 of SFAS No. 5 indicates that

a.
Contingencies that might result in gains usually are not reflected in the accounts since to do so might be to recognize revenue prior to its realization, and

b.
Adequate disclosure shall be made of contingencies that might result in gains, but care shall be exercised to avoid misleading implications as to the likelihood of realization.

 The receipt of the proceeds cannot be
determined beyond a reasonable doubt given the length of the contingency period and increased legislative concern regarding the health risks and social costs associated with the use of tobacco products. The corporation is of the view that it has
followed the appropriate accounting and properly disclosed the potential gain to financial statement users.

2.
Both Accounting Principles Board Opinion No. 16 (APB No. 16) and Statement of Financial Accounting Standards No. 141 (SFAS No. 141) addressed the accounting for contingent
consideration in a business combination in a similar manner.

 Paragraph 78 of APB No. 16 indicates that “Consideration that is issued or issuable at the expiration of the contingency period or that is held in escrow pending the outcome of a contingency shall be disclosed
but not recorded as a liability or shown as outstanding securities unless the outcome of the contingency is determinable beyond a reasonable doubt.”

 Paragraph 26 of SFAS No. 141 indicates that “Consideration that is issued or issuable at the expiration of the contingency period or that is held in
escrow pending the outcome of the contingency shall be disclosed but not recorded as a liability or shown as outstanding securities unless the outcome of the contingency is determinable beyond a reasonable doubt.”

 Since it is not appropriate to recognize a liability or show an outstanding
security for a contingency that is not determinable beyond a reasonable doubt then it would also be inappropriate to recognize a receivable for the same contingency. The corporation believes that the guidance provided by both of these pronouncements
is clearly more analogous to the transaction under consideration than EITF 01-10.

 Question 2: We note your statement that the effective tax rate declined slightly from the prior year. Your disclosures in Note 21 indicate that your effective tax rate is significantly below the statutory rate, and that this tax rate
is due to the effects of significant permanent income tax items. Expand your management discussion and analysis to address the trends of the permanent items and how it impacts income tax expense, net income and liquidity.

 Response 2: The following disclosure will appear in the management’s discussion
and analysis of future filings when discussing the change in tax expense from fiscal 2003 to 2004.

 3

 Comparable disclosures will be incorporated in the discussion of the tax expense in future management’s discussion
and analysis. The underlined portion is being added to existing disclosures in response to the staff’s comment.

 Income Tax Expense The effective tax rate decreased from 17.7% in 2003 to 17.5% in 2004. The fiscal 2004 tax expense was impacted by a number of significant items
which are set out in a reconciliation of the corporation’s effective tax rate to the U.S. statutory tax rate in Note 21 to the Consolidated Financial Statements. The most significant of these items was the finalization of certain tax reviews
and audits for $207 million less than originally anticipated. In addition, the corporation recognized a tax charge of $140 million in connection with the remittance of current year foreign earnings to the U.S.

 As a global commercial enterprise, the corporation’s tax rate from period to period
can be affected by many factors. The most significant of these factors are changes in tax legislation, the corporation’s global mix of earnings, the tax characteristics of the corporation’s income, acquisitions and dispositions. It is
reasonably possible that tax legislation in the jurisdictions in which the corporation does business may change in future periods. While such changes cannot be predicted, if they occur, the impact on the corporation’s tax assets and obligations
will need to be measured and recognized in the financial statements. Such changes can have a material impact on income tax expense, net income and liquidity. In the near term, significant changes in the global mix of earnings or the tax
characteristics of the corporation’s income are not anticipated. Significant business combinations or dispositions may impact the effective tax rate of the corporation in future periods.

 The corporation’s tax returns are routinely audited and settlements of issues raised
in these audits sometimes affect our tax provisions. The corporation has ongoing audits in the United States and a number of international jurisdictions. The United States federal income tax returns filed by the corporation through July 1, 2000 have
been examined and closed by the Internal Revenue Service. Consistent with prior experience, the corporation expects the Internal Revenue Service to initiate the audit of the tax returns of fiscal 2001 and subsequent years. The obligations recognized
in the financial statements reflect the probable settlement of anticipated future tax audits. In addition, the corporation believes that it has sufficient cash resources to fund the settlement of these audits.

 Item 8. Financial Statements and Supplementary Data – Consolidated Statements of
Common Stockholders’ Equity, page 53

 Question 3: We note
your presentation of Comprehensive Income and Accumulated Other Comprehensive Income. Disclose the components of Accumulated Other Comprehensive Income for each balance sheet date presented, as required by FAS 130, paragraph 26.

 Response 3: The components of other comprehensive income for the past three years are
presented in the table set out below. In the Form 10-Q for the quarter ended April 2, 2005, which was filed with the Commission on May 6, 2005 the corporation made this same disclosure and future filings will present comparable information.

 4

 (In millions)

 Cumulative

 Translation

 Adjustment

 Net Unrealized
Gain (Loss)

 On Qualifying

 Cash Flow Hedges

 Minimum

 Pension

 Liability

 Adjustment

 Accumulated

 Other

 Comprehensive

 Income

 Balance at June 30, 2001

$
(1,389
)

$
(5
)

$
(127
)

$
(1,521
)

 Other comprehensive income (loss) activity

116

(9
)

(56
)

51

 Balance at June 29, 2002

(1,273
)

(14
)

(183
)

(1,470
)

 Other comprehensive income (loss) activity

345

(3
)

(606
)

(264
)

 Balance at June 28, 2003

(928
)

(17
)

(789
)

(1,734
)

 Other comprehensive income (loss) activity

135

3

202

340

 Balance at July 3, 2004

$
(793
)

$
(14
)

$
(587
)

$
(1,394
)

 Note 1 – Basis of
presentation, page 55

 Question 4: Expand your disclosure to
provide a description of your major products or services and your principle markets, including the locations of those markets as required by SOP 94-6, paragraph 10. Disclose the relative importance of your operations in each business and the basis
for the determination. Please disclose this information in your audited financial statements notes rather providing a cross reference to information outside the financial statements.

 Response 4: A disclosure comparable to that set out below will appear in future filings. The underlined portion is being added to
existing disclosures in response to the staff’s comment.

 Note 1 –
Nature of Operations and Basis of Presentation

 Nature of
Operations Sara Lee Corporation (the corporation) is a United States-based multinational corporation. The corporation’s principal product lines are branded packaged meats products; fresh and frozen bakery products; roast and ground
coffee; household products and branded apparel products consisting primarily of intimate apparel, knit products and legwear. The relative importance of each operation over the past three years, as measured by sales and operating segment income, is
presented in Note 22 – Business Segment Information of these financial statements. Food and Beverage sales are made in both the retail channel to supermarkets, warehouse clubs and national chains, and the foodservice channel. Household Products
are primarily sold through the retail channel while distribution channels in the Branded Apparel business range from department and specialty stores for premium brands to warehouse clubs and mass-merchandise outlets for value priced brands.

 Basis of Presentation The Consolidated Financial Statements include
Sara Lee Corporation and its controlled subsidiaries (the corporation) and have been prepared in accordance with generally accepted accounting principles in the United States (GAAP). The preparation of the Consolidated Financial Statements in
conformity with GAAP requires management to make use of estimates and assumptions that affect the reported amount of assets and liabilities, revenues and expenses and certain financial statement disclosures. Significant estimates in

 5

 these Consolidated Financial Statements include allowances for doubtful accounts receivable, net realizable value of
inventories, the cost of sales incentives, useful lives of property and identifiable intangible assets, the evaluation of impairments of property, identifiable intangible assets and goodwill, income tax and valuation reserves, the valuation of
assets and liabilities acquired in business combinations, and assumptions used in the determination of the funded status and annual expense of pension and postretirement employee benefit plans. Actual results could differ from these estimates.

 The corporation’s fiscal year ends on the Saturday closest to June 30.
Fiscal year 2004 was a 53-week year, while fiscal years 2003 and 2002 were 52-week years. Unless otherwise stated, references to years relate to fiscal years. Certain prior year amounts have been reclassified to conform with the current year’s
presentation.

 Note 2 – Summary of Significant Accounting
Policies

 Question 5: We note your disclosure of the goodwill
associated with each business segment in Note 20 on page 73. Expand your disclosure to disclose as part of your accounting policy for goodwill how you determined the reporting segments to which goodwill was assigned.

 Response 5: A disclosure comparable to that set out below will appear in future
filings. The underlined portion is being added to existing disclosures in response to the staff’s comments.

 Goodwill Goodwill is the difference between the purchase price and the fair value of the asse