State finds its sales slip for the present.

• Position: Retail

Pick just about any place in North Carolina or any category of merchandise and the trend was the same in 2002: Retail sales fell into a sinkhole bigger than the one in the Hickory restaurant parking lot that swallowed a Corvette last fall. For the first time in a decade, they declined statewide, falling 3.7% during the 2001-2002 fiscal year. Speaking of motor vehicles: Sales were down $1.7 billion, a drop of more than 9%, one of the heftiest setbacks for Tar Heel retailers.

Across the state, cash registers rang up $4.9 billion less during the fiscal year than a year ago, and hardest hit were the largest cities. Greensboro dropped 9.8%, followed closely by Charlotte, down 9.2%.

A few places managed to eke out sales increases. Asheville was up 1.6%, while Cary rose 1%. The one standout: Durham, where sales increased 10.7% from the previous year, thanks to the opening of the upscale Streets at Southpoint shopping mall, which boasted the state's first Nordstrom.

The Triangle's second new mall, Triangle Towne Center in Raleigh, opened in August. Its sales weren't reflected in the state's annual roundup of retail sales. But the effect of the new malls likely will be to grab market share from older centers. Already, South Square Mall in Durham has shut down, adding nearly a million square feet of vacant retail space. Karnes Research Co. in Raleigh, which tracks the retail real estate market, reported the retail vacancy rate for the first six months in the Triangle at 5%, up from 3.6% the previous year.

Karnes' tracking of retail in the Charlotte region showed a slight uptick during the first half of the year, but that was partly because Charlotte already had so much empty retail space to fill. The Charlotte metro area, which includes outlying counties, recorded an 8.5% vacancy rate during the first half of the year, down from 9% during the same period a year ago.

While the slow economy pinched many retailers, it worked to the advantage of Matthews-based Family Dollar Stores, whose modest neighborhood discount stores tend to thrive when higher-end retailers struggle. The retailer also has been focusing more on staples such as brand-name house cleaners, paper goods and soft drinks and less on soft goods, such as clothing. Those factors helped Family Dollar reach record sales and earnings for the fiscal year ending in August. Net income hit $216.9 million, up 14.5% from the previous year. "In this economy, the consumer, particularly the low- to...