Economy doesn't let sales slip for stores.

• Position: North Carolina - Illustration - Statistical Data Included

With employment high and consumer prices low, North Carolinians have been doing the logical thing with their money -- shopping. Retail sales for the fiscal year ended in June hit $126.3 billion, up 8% from 1998. And there is evidence that the trend will continue, although at a slightly less robust pace.

In November, James Kleckley, associate director of planning and institutional research at East Carolina University in Greenville, was expecting a solid holiday season, with sales up 7% from the previous year. For 2000, he predicts a respectable 5% growth in retail sales. "The one thing that we have to be concerned about would be the oversupply of retail establishments. Maybe a town can support one Wal-Mart or two Wal-Marts, but can it support 10 Wal-Marts?"

That question became more pressing to shopping-mall operators in the western Piedmont in September when Arlington, Va.-based Mills Corp. opened the 1.4-million-square-foot Concord Mills near Charlotte. The mall combines outlets and other stores with restaurants, movie theaters and recreational activities such as rock climbing. Mills boasts that its malls draw from a 100-mile radius -- putting shopping centers from Greensboro to Asheville on alert.

The grocery sector is feeling the impact of stiff competition, too. Food sales grew modestly in fiscal 1999, up 2.5% statewide, but grocery stores' share has been flat. They posted $6.8 billion in sales in fiscal 1999, almost exactly the same as in 1998. Despite stagnant sales, the major supermarket chains have continued building new stores, particularly in hot spots such as Charlotte and the Triangle. Retail analysts have been predicting a shakeout, and they got their first taste of it last year with the fall of Hannaford Brothers Co.

The Maine-based grocery chain hopped several states to enter North Carolina in 1994. It tried to position itself somewhere between the state's two main chains -- upscale Charlotte-based Harris Teeter Inc. and low-cost Salisbury-based Food Lion Inc. But Hannaford's sales never met projections. In August, it took a $3.6 billion buyout offer from Food Lion, which will get 152 Hannaford stores, most in the Northeast.

For Food Lion, the Hannaford takeover is part of a new strategy aimed at remaining a major player in a consolidating industry. To aid the make over, its parent, Etablissements Delhaize Freres et CIE "Le Lion" SA of Belgium, restructured it, forming a new holding company, Delhaize America Inc., and moving...