When S. Walter Woodward and Alvin Lothrop began their department store here in 1880 - at a time when the concept of general merchandise sales af fixed prices was relatively young - they patterned their operation on the pioneering examples of John Wanamaker's in Philadelphia and Marshall Field's business in Chicago.

Despite advertisements for new Paris fashions, however, one young woman noted that Washington was not "a brag shopping place," according to historian Constance McLaughlin Green.

Today, the department store business in America is remarkably similar to that of 100 years ago but metropolitan Washington has become such a "brag" shopping place that retail and wholesale trade is one of the main factors in a governmentdominated economy. Washington is the national retail industry's affluent Main Street, and virtually every prominent outfitter of men and women or their homes wants to participate in the sales and profits.

The year just ended was hardly the sort of retail experinece that merchants here have come to expert. Retail volume in the city and its suburbs rose only 8 per cent to about $9.5 billion, with much of the gain reflecting higher automobile sales.

Although the Christmas season was weak, many businessmen attributed the modest consumer spending here to a change of adimistrations. They now anticipate a slowstarting 1977 but one which will pick up strongly at Easter time and end up with a larger sales gain than last year - perhaps on the order of 10 to 12 per cent, fueled by stimulative steps of the Jimmy Carter government.

Overall, the Washington area economy will be more healthy this year than at any time during a recent local malaise that has lasted several years - an unusually long time for a supposedly long time for a supposedly recession proof metropolitan area dominated by government.

Residential construction came back to life here last year and will continue to expand in 1977, although housing starts remain below the boom levels of the decade before recession began.

Contributing to the higher retail sales this year will be increased employment and a lower level of joblessness, with the local economy again starting to expand. Interest rates should remain stable through most of the year, helping to encourage more real estate activity; plenty of loan funds should be available at area banks and savings and loan associations; consumer prices locally are expected to rise mainly because of soaring winter fuel bills, higher gasoline prices in 1977, increased automobile insurance rates and higher prices for beef at grocery stores and restaurants.

The fuel bill increase here may send the area consumer price index up at a faster rate over the coming year than those of some other urban centers not experiencing a sharp difference in winter fuel needs between this year and last. For the 12 months ended last November, area consumer prices were up 5.7 per cent from the previous year compared with 5 per cent for all U.S. cities. The increase in 1977 may be 6 per cent, according to assessments by some area business.

Robert F. Tardio, president of Suburban Bancorporation in Hyattsville, is among local business leaders who expect the Carter administration's arrival to help give the local economy a boost.

"During the early months, new programs will be introduced which will move dollars into or at least through numerous area firms on a contract basis . . . Bank lending will be required to support this growth in area business as well as . . . the anticipated upturn in housing," said Tardio, whose firm owns Suburban Trust Co., the largest bank based in the Maryland suburbs of Washington.

Tardio and other area bankers experienced a sluggish demand for loans last year as the economic pause encouraged conservatism among consumers and area businesses. That attitude is expected to continue a while longer, as people assess the new government's first steps.

"It seems doubtful that a drastic change will occur anytime soon. If a change does take place, it would appear that it will not be before the latter part of 1977," said Joseph H. Riley, president of the D.C. Bankers Association.

"Nothing will be dramatic anymore," is the way Giant Food president Joseph Danzansky looks at metropolitan Washington's economic growth over the next few years. There will be expansion, he said, but it will be "slow and steady," with gradual population increases.

Macke Co. chairman Meyer Gelfand said he thinks the fact that retailers and manufacturers "are now being more cautious and are forecasting their production and buying needs on a more conservative basis" is a healthy sign that could avoid boomorbust times. He predicted a "reasonably good, but not spectacular, performance" in 1977, with President Carter increasing consumer and business confidence.

"When a new presidential administration comes to Washington, there always is an increase of nationwide interest in this area, even above the normally high level," noted realtor Foster Shannon, the new president of the Metropolitan Washington Board of Trade, the area's principal business group.

Shannon said the Board of Trade plans to exploit the high visibility that a new administration will bring to Washington by launching a new "aggressive business marketing campaign" called "The Case for Wasington executives who come here on business - trying to convince them to move to or invest in the area.

Despite obvious local problems - principally the absence of financing for the full subway, the lack of a meaningful economic development program to revive the District of Columbia and a crisis of confidence building over Mayor Walter E. Washington's administration - the feeling of confidence about the future is returning.

"The disaster attitude of 'doom and gloom' has passed," said Mort Salan, president of the Kal, Merrick & Salan, Inc., advertising agency. "The country is on the mend and it shows," he said, and that points to increased consumer spending as 1977 progresses.

In the Washington metropolitan area, 268,000 persons were employed by the retail or wholesale industries at the end of 1976, the third largest employment sector of the local economy - behind government (515,500) and services such as hotels, lawyers, accounting, medicine and personal care (313,300). From 1970 to 1975, the attraction of suburban shopping centers added 38,200 retail and wholesale jobs outside the District. In the city itself, however, retail and wholesale trade has been declining for many years; and over the same fiveyear period, city employment in this sector fell by 15,100 jobs.

The old downtown Washington shopping core along F and G streets NW clearly is in trouble, but not dead. Pennsylvania Avenue is far from the grand thoroughfare worthy of its place in the nation's capital, as Carter will discover on Jan. 20 when he rides toward the White House after his inaugural - right past the decaying Willard Hotel, a true landmark.

Congress will be asked this year to finance plans for development of Pennsylvania Avenue with commercial and residential centers - something Congress did not do last year. Supporters of the plan, which includes renovation of the Willard and other old buildings, believe it could be the key to a recovery of the city's former premiere shopping center which still is one of the largest in metropolitan Washington.

Shopping has become an attractive pastime that rivals television for adults. The shopping meccas, called malls, have replaced street corners or neighborhood grocery stores as the places where many teenagers hang out. Annual sales at just one typical large center, Montgomery Mall, top $100 million - or roughly half the annual sales of all the modern Woodward & Lothrop stores.

Interest in the retail business as a life style rose to a fever pitch late last year when Bloomingdale's of New York finally got its first store open here, at Tysons Corner Center in Northern Virginia. In contrast with the modest coverage given Walter Woodward and Alvin Lothrop by Washington newspapers back in 1880, the arrival of Bloomies became a media saga - starting with newspaper stories two years ago on what it would be like when Bloomingdale's opened.

As opening day approached last September, the coverage of Bloomingdale's became a virtual daily series. One prominent Washington retailer who thought he had been doing the same type of business as Bloomingdale's is the firstdepartment store ever to open."

This year, there will be a repeat performance for Bloomingdale's when it opens 260,000-square-foot store in Montgomery County. Bloomies will be part of the White Flint Mall on Rockville Pike, which will include a large branch of Lord & Taylor, 100 smaller businesses, 5 theaters and 6 restaurants in luxurious surroundings. The $50 million mall is set to open in March, and Bonwit Teller of New York will open its first area store in the same complex a year later.

Before that, however, the nation's Middle Atlantic region will get its first Neiman Marcus store - a magnet of affluence at the corner of Western and Wisconsin Avenues NW in the District, scheduled to open next fall. The Dallas-based specialty store will be joined inside a modern mall by dozens of smaller stores, although leasing to date reportedly has been slow.

Already located near Western & Wisconsin is what amounts to a major regional retail center, with one of the most successful Lord & Taylor branches in the country (to be completely renovated this year), a heavyvolume but crowded Woodies branch, the most profitable Saks Fifth Avenue off Fifth Aveune and a host of smaller shops and services.

Woodies wants to expand its store and add space for a Garfinckels branch and other stores in a new retailcommercial center that has been halted by a zoning controversy. Court decisions this year may determine finally if the project can be started or if Woodies must continue with its present space. If the complex is blocked. Garfinckel's reportedly plans to seek a site inside the District between Lord & Taylor and Newman Marcus.

There's more: Montgomery Ward & Co. will open a 152,000-square-foot store near Gaithersburg in the spring and, across Route 355, ground has been broken for a separate 1.2-million-square-foot Lake Forest mall at Montgomery Village, to include five major stores (Sears, Woodies and J.C. Penney among them) and to open in late 1978 or early 1979 as Montgomery County's largest retail center.

In the District, Oliver T. Carr Co. is building International Square in the block bounded by K. I, 18th and 19th streets NW - 1.2 million square feet of office and retail space opening onto a 10,000squarefoot atrium. A planned retail mall will have up to 200,000 square feet with interior subway connection.

On lower Connecticut Avenue NW, Raleigh's is planning a major expansion of its store across DeSales Street from the Mayflower Hotel. And in the city's old downtown section, Houston developer Gerald D. Hines is expected to announce later this year whether he wants to go forward with construction of a $50 million retail-office-hotel center on G Street between 12th and 13th streets NW. The complex could include new department store units.

In Northern Virginia, new retail malls are being planned for the Fairfax City area. Throughout the area, retailers such as Peoples Drug Stores are renovating their branches Giant Food, Inc., hopes to complete negotiations this year that would lead to construction of a new supermarket in the Shaw area in a joint venture win an innercity community group.