Stores start to feel wind in their sales.

• Position: Retail

Layoffs, war and the lack of a significant economic recovery gave North Carolina shoppers plenty of reasons to keep their cash stashed during the fiscal year ended June. Still, merchants managed a 4.3% gain in retail sales to $132.7 billion. "It's nothing dramatic, but it was on the upswing. And that's positive," says Michael Walden, an economist at N.C. State University.

The growth came despite downward pressure on prices from the growth of discounters such as Wal-Mart. Retail pricing has become much more competitive, a trend that's not going away, Walden says. "People are simply not willing to pay more for things so there's pressure to keep margins low."

Witness the success of Matthews-based Family Dollar Stores, which opened 470 stores from January through November 2003. That boosts its total to 5,102 in 43 states. The company reported its best results ever in the fiscal year ended Aug. 30. Net income was $247.5 million on sales of $4.8 billion, both up 14.1% from 2002.

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Krispy Kreme Doughnuts also flourished last year. The Winston-Salem-based chain ventured outside of North America for the first time, opening stores in Sydney, Australia, and in Harrods department store in London. Krispy Kreme plans to open 30 more stores in Australia and New Zealand during the next five years.

In September, Lowe's opened the first phase of its $90 million headquarters near Mooresville. By year's end, about 1,200 employees, including its top executives, had moved there from Wilkesboro. The hardware-store chain, the nation's 14th-largest retailer, announced in December that it was buying back $1 billion in stock.

Matthews-based grocer Harris Teeter provided an earnings boost for parent company Ruddick. Charlotte-based Ruddick reported net income of $59.9 million for the fiscal year ended Sept. 28, compared with $52 million the year before. Sales rose 3% to $2.72 billion. Ruddick attributed the higher revenue to Harris Teeter rather than its thread-making subsidiary, American & Efird.

The news wasn't as good at Charlotte-based Cato, which sells women's apparel in more than 1,000 stores in 26 states. Through October, comparable-store sales were down 7% from the same period in 2002. Founders Wayland H. Cato Jr., chairman of the board, and Edgar T. Cato, a board member, planned to retire Jan. 31. No successors had been named in mid-December.

The trend toward discount will be interrupted this year. High-end retailer Saks Fifth Avenue...