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CORRESP
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     CORRESP

123 South Front Street,
Memphis, TN 38103 Phone (901) 495-6500

March 18, 2005

Securities and Exchange
Commission
Attn: Michael Moran
450 Fifth Street, N.W.
Washington, DC  20549

           RE:
Form
10-K for the year ended August 28, 2004
Form 10-Q for the quarter
ended November 20, 2004
File No. 1-10714

Dear Mr. Moran,

Below are our responses to your
questions in your letter dated March 9, 2005. We have repeated your questions and replied
in bold immediately under the question.

Exhibit 13.1

Item 7.  Management’s
Discussion and Analysis of Financial Condition and Results of Operations, page 4

Liquidity and Capital
Resources

Financial Commitments,
page 9

1.

Your response to our prior comment 2 relating to purchase obligations states that you do
not generally enter into unconditional purchase obligations. Please explain to us what you
mean by “unconditional purchase obligations,” and tell us if you enter into any
agreements to purchase goods that are enforceable and legally binding that generally
specify the terms and the minimum quantities to be purchased. Refer to Item
303(a)(5)(ii)(D) of Regulation S-K.

AutoZone Response:
Unconditional
purchase obligations have the same meaning as “purchase obligations” as defined
by Item 303(a)(5)(ii)(D) of   Regulation S-K. We do not enter into any agreements to
purchase goods that are enforceable and legally binding that   generally specify the
terms and the minimum quantities to be purchased.

2.

Your response to our prior comment 3 states that you excluded from the table contractual
obligations that will require future cash payments of nearly $100 million because you did
not have firm scheduled maturity dates. In future filings, disclose in a footnote to the
table the nature and the amounts excluded and the reasons why. See Item 303(a)(5)(i) of
Regulation S-K.

AutoZone Response:
Beginning
with our Form 10-K for the fiscal year ending August 27, 2005, we will disclose in a
footnote to the contractual   obligations table the nature and the amounts excluded
and the reasons why.

Page 1 of 6

Consolidated Financial
Statements

Notes to Consolidated
Financial Statements

Note A - Summary of
Significant Accounting Policies, Pages 19-22

Property and
Equipment, page 20

3.

We have read your response to our prior comment 7 relating to the lease term you use to
determine the depreciation period of leasehold improvements. In future filings, please
revise your disclosures to clarify how you define “remaining lease term” for
these assets as defined by paragraphs 5(f) of SFAS 13 and the reason why. In this regard,
please advise and revise future filings to indicate, if so, that the first renewal option
included in the lease term is reasonably assured.

AutoZone Response:
Beginning
with our Form 10-K for the fiscal year ending August 27, 2005, we will disclose that all
leasehold improvements   are amortized over the lesser of their useful life or the
remainder of the lease term, which includes any reasonably   assured renewal
periods. The first renewal option as well as additional renewal periods are only included
in the remaining   lease term when renewal is reasonably assured. In most of our
combined leases of land and buildings the first renewal   period is not reasonably
assured at the inception of the lease whereas in most of our leases for only land, where
the   Company owns the building, the first renewal period as well as additional
renewal periods are reasonably assured at the   inception of the lease.

4.

You disclose in Form 8-K filed on March 2, 2005 that you expect to record in the second
quarter of fiscal 2005 a one-time charge estimated after-tax amount not to exceed $25
million relating to the cumulative non-cash adjustment for changes to your accounting for
leasehold improvements. Supplementally please advise us how you have calculated this
adjustment including the components of the adjustment. Further, please clarify for us the
reason why the impact is only $1 million, after-tax, for fiscal 2005.

AutoZone Response:
We
recently completed a detailed review of our accounting for rent expense and expected
useful lives of leasehold   improvements. We considered each lease and each asset
associated with a leased property. We noted inconsistencies in the   periods used to
amortize leasehold improvements and the periods used to straight-line rent expense.
Additionally, we noted   inconsistencies (primarily related to leases entered into
and assets deployed prior to August 31, 1999) between the   Company’s current
policy and the actual treatment of lease rent expense and expected useful lives. During
the quarter   ended February 12, 2005, the Company recorded a $40.3 million pre-tax
adjustment ($25.4 million after-tax) to correct these   inconsistencies representing
$18.8 million in amortization expense and $21.5 million in deferred rent expense, which
  includes the impact on prior years, to reflect additional amortization of
leasehold improvements and additional rent   expense as if a consistent treatment
had always been followed by the Company. The impact of the adjustment on any prior
year is immaterial as the adjustment covers a span of time of over twenty years.
Excluding the prior year portion of this   adjustment, the impact on the twenty-four
week period ended February 12, 2005 was a net increase to expense of   approximately
$400,000 after-tax. Based on this amount, we expect the full-year impact to be less than
$1 million

Page 2 of 6

after-tax.
The adjustment’s impact on the current year was mitigated by lower amortization of
leasehold improvements as the amortization terms of some older assets were shortened
resulting in no amortization in the current year.

Revenue
Recognition, page 20

5.

We have read your response to our prior comment 8 regarding an expansion of your
disclosures relating to the POS arrangements with certain vendors. You state that sales
relating to these type arrangements in fiscal 2004 approximated 3% of total sales, or
$169.1 million, and that reporting such information in future filings would require system
and process changes. It is our understanding that you had these type arrangements with
only a very few vendors as of the end of fiscal 2004, but that during fiscal 2005 you have
continued to substantially expand the number of vendors being converted to POS
arrangements. We continue to believe that your future disclosures should include the
amount of sales included in the income statement relating to these types of POS
arrangements for all periods presented. Also discuss in MD&A the impact you anticipate
these arrangements will have on your liquidity and financial condition in future periods
based on your current plans.

AutoZone Response:
We
discuss in MD&A that POS arrangements benefit our liquidity, as we do not recognize
the liability to the vendor until   the product has been sold. In our previous correspondence regarding POS arrangements, our sample POS   disclosures
did not report sales of merchandise under POS arrangements as we concluded that such
information was neither   required nor relevant. As reporting such information would
require system and process changes, we would like to understand   the basis for your
belief that disclosure of additional information related to POS arrangements is required
and relevant to   the reader of our financial statements.

6.

Please explain to us in more detail the conversion process with your vendors including the
percentage of vendors converted to date. Please also tell us the amount of related product
sales through February 12, 2005, and the amount of sales you estimate for fiscal 2005
based on your current plans of converting suppliers in the future.

AutoZone Response:
Existing
vendors are converted to POS based on vendor-by-vendor negotiations and include one or
more of the following:

i.
only
new products are set up under POS arrangements;

ii.
existing
products are converted to POS arrangements and the vendor pays us for the inventory via a
cash payment or a                      one-time credit memo to apply against existing
obligations owed to the vendor; and

iii.
existing
products are converted to POS arrangements and we finance the arrangement for a period of
time not to exceed 24                      months and the vendor pays us for the
inventory via monthly credit memos to apply against existing and future
                     obligations owed to the vendor.

The
vendor issues all credit memos within 30 days of the execution of the POS conversion
agreement. These credit memos   have scheduled maturities and by agreement can be
converted upon maturity to a cash payment from the vendor upon written   notice from
us.

Page 3 of 6

As
of February 12, 2005, we have POS arrangements with 175 of our 1,633 merchandise vendors,
or 11%. As stated in previous   correspondence, we track the cost of merchandise
that is sold under POS arrangements for billing purposes, but the retail   and gross
margin on these sales is not identified separately from non-POS items of similar products.
Based on the cost of   merchandise sold under POS arrangements for the twenty-four
week period ended February 12, 2005 and our total Company gross   margin percentage,
sales of inventory under POS arrangements were approximately 8% of total sales, or
approximately $188   million. As we do not separately track the amount of sales from
merchandise under POS arrangements, we are unable to   accurately estimate these
sales for the remainder of this year. Furthermore, we cannot predict which vendors, if
any, and   which merchandise, if any, will be converted to POS.

7.

Please explain to us how vendors finance their purchase of products from you as they are
converted to a POS arrangement and the accounting entries you record when you sell
existing inventory back to a supplier, including those sales where you finance the sale.
Tell us the terms of the financing arrangements with you and if you have recourse. Tell us
when the liability from the supplier for the transition inventory is triggered, that is,
at the time of your conversion agreement or at the time of your sale to the consumer.

AutoZone Response:
For
inventory that is converted and not financed, the vendor either remits a one-time cash
payment or a credit memo that is   applied against an existing obligation to that
vendor. Upon executing this type of arrangement, we record the following   entries
for the amount of inventory converted to POS:

The
following accounts are debited:

    Cash

      or

    (if
      cash payment is made)

    Accounts
      Payable

    (if a credit
      memo is issued by the vendor to be applied to an

        existing obligation due to the vendor by us)

The following account is credited:

    Inventory

    (for
      the actual amount of inventory converted to POS)

We
have financed the conversion of inventory to POS arrangements for terms not to exceed 24
months. Upon executing the   conversion agreement with the vendor we record the
following entries:

The
following accounts are debited:

    Current
      receivable

    (for
      the current portion due from vendor)

    Long-term
      receivable

    (for the
      long-term portion due from vendor)

    Operating
      expense

    (loss on
      discounting related to the imputation of interest as

        interest is not charged to the vendor)

The
following account is credited:

    Inventory

    (for
      the actual amount of inventory converted to POS)

We
believe that the liability from the vendor for the inventory is triggered at the time of
the conversion agreement   because all of the credit memos are issued within 30 days of
execution of the conversion agreement, credit memos become due   and payable upon
maturity and we have recourse to the vendor. As stated in our response to (6) above, the
vendor issues   credit memos in an amount that aggregates the cost of the inventory that
is being repurchased by the vendor. We apply   these credit memos monthly against
existing and future obligations owed by us to the vendor. However, the credit memos
  have scheduled maturities and by agreement can be converted upon maturity to a cash
payment from the vendor upon

Page 4 of 6

written
notice from us. In addition to the inventory serving as collateral for the credit
memos, we also have recourse to the vendor.

8.

Explain to us who has risk of loss for the merchandise held by you under these POS
arrangements and why. Tell us the dollar amount of your inventory suppliers have
repurchased from you during fiscal 2005, and if you are obligated to sell all of the
merchandise held by you under these arrangements.

AutoZone Response:
As
discussed in our previous correspondence regarding POS arrangements, the risk of loss remains almost
entirely with the vendor. The   vendor holds title to the product, retains the
ultimate decision regarding product placement, has the ability to remove or   recall
its inventory at any time with reasonable notice, is responsible for all product returns,
and is responsible for all   unsold inventory and thus bears the risk of inventory
obsolescence. We have risk of loss similar to a warehouser.

For
the twenty-four week period ended February 12, 2005, suppliers have repurchased $25.1
million in inventory from us in   order to convert such inventory to POS
arrangements. We have no obligation to sell any or all inventories held by us under
POS arrangements.

9.

Supplementally please show us what your revised disclosures relating to these POS
arrangements will look like in future filings. We may have further comment upon review of
your response.

AutoZone Response:
As
reporting POS sales would require system and process changes and in order to appropriately
revise our current   disclosures, we would like to understand the basis for why you
believe disclosure of additional information related to POS   arrangements is
required and relevant to the reader of our financial statements.

Note C - Accrued
Expenses, page 34

10.

We have read your response to our prior comment 13 relating to your reversal of all
warranty liabilities on certain vendor products resulting in credits to earnings of $42
million during fiscal 2004. Where vendors have not assumed all warranty obligations, we
note you net vendor allowances against warranty liabilities. Please tell us the amount of
warranty liabilities you estimated as of August 28, 2004 prior to the reduction for vendor
allowances. Also, for each period presented, please disclose the amount of allowances in
excess of warranty liabilities reclassed to inventory. Please provide us with support and
your basis in GAAP for netting vendor allowances against warranty liabilities that you are
responsible for providing customers. Please address the requirements of FIN 39 in your
response.

AutoZone Response:
In
cases where vendors have not assumed all warranty obligations, our warranty liability
represents the gross obligation to   the customer, and accordingly, FIN 39 is not
applicable.

We
may or may not receive defective merchandise allowances, but when we earn such allowances
we net the allowance against   warranty expense within cost of sales in accordance
with EITF 02-16, but not against the warranty liabilities. For vendor   allowances
that are in

Page 5 of 6

excess
of the related estimated warranty expense for the vendor’s products, the excess is
reclassed to inventory and recognized as a reduction to cost of sales as the
corresponding product is sold in accordance with EITF 02-16. Vendor funding for
warranty obligations is the result of continuing vendor funding arrangements. Vendor
funding comes in many different forms and in the aggregate is an on-going activity. We
believe it would be misleading to disclose and discuss the impact of only one type of
vendor funding.

Please let us know if you have any
further questions or if