Like an unwatered lawn fading in the August sun, the great grocery store war of 1981 is slowly dying.

The "warehouse prices" banners are gone from the windows of Giant supermarkets, Safeway has changed it slogan to "guaranteed low prices" and A&P is stressing double returns on coupons rather than warehouse prices.

"We're not quitting warehouse prices yet," said Ernest G. Moore, local media representative of Safeway Stores Inc.

"The program isn't dead," insisted Barry Scher, spokesman for Giant Food Inc., Washington's biggest grocery chain. "We have adjusted some of our prices to assure a fair return for our stockholders."

"We're raised a few things, too," admitted Moore, sounding almost as anxious to acknowledge that prices are going up as he was insistent that food shoppers are still getting extraordinary bargains.

Supermarket chains "have absorbed some of the inflationary price increases this year, but they can't keep doing it," said Arnold Katz, executive editor of Chain Store Age-Supermarkets.

Since April, Washington-area consumers have laughed in the face of inflation, watching grocery store prices drop almost by six percent while food prices went up everywhere else in the country.

It couldn't last, and it didn't.

Not with Giant, traditionally one of the most profitable supermarket chains in the country, about to report that it lost money in the three months that ended Aug. 14, its first quarterly loss in a decade.

Not with Safeway, the biggest in the business, admitting to "seriously depressed" profits in the Baltimore-Washington region.

"I said it would last six months and it lasted five," said Charlotte Newton, president of the Virginia Citizens Consumer Council and a self-proclaimed skeptic about the benefits of the food price war.

Newton contends the latest price increases are harder for consumers to recognize because Giant and Safeway stopped marking prices on individual items when the introduced "warehouse pricing" in early April.

"Consumers I've talked to," Newton said, "say they've lost their awareness of prices. Without item prices it's going to be extremely hard to keep control of what they're paying."

"Warehouse pricing," quickly became a synonym for "cheap food" but what the term originally meant was that prices would no longer be marked on individual items, only on the shelves as they are in discount food warehouses.

Giant Food Chairman Israel Cohen said the choice was up to consumers: The could have the price stamped on every bottle and can, or they could read the prices off the shelf signs and get lower prices.

"How much lower?" has turned out to be the cruicial question. Newton and othe consumer activists claimed the savings would be small because Giant's labor union contracts prohibited the chain from laying off the people whose job used to be marking prices.

Giant admitted the program would be costly until the price markers could be worked into other jobs. By cutting prices sharply, Giant officals said repeatedly, they could increase sales enough to make up for the lower profit margin.

But "warehouse prices" cut so deeply that Giant -- the company Chain Store Age picked as the 1981 supermarket chain of the year -- will show a loss when its latest quarterly operating results are released in a few days.

Giant and Safeway are both believed to have increased their share of the local business during the last few months. Estimates by Food World, a regional trade paper, are that Giant boosted its business by 4 percentage points to 37 percent of the market and Safeway gained a full point to 28 percent.

One of the much smaller rivals in the market, Pantry Pride, gave up trying to compete with the two dominant chaines and closed all its Baltimore- and Washington-area stores a few weeks ago.