Over the last decade, shoppers have been treated to a magnificent banquet of retailing spread generously across the metropolitan area -- with new malls and strip shopping centers opening, stores arriving in droves and a multitude of products flooding the market.

But in the last year, the retail landscape has seemed a lot less sumptuous, as a slew of high-profile jolts shook retailing here and around the country.

Garfinckel's and Fantle's Drug Stores are gone. W. Bell & Co., Best Products Co., Stern's Office Furniture Inc., Sassafras, the Sporting Life Inc., Reliable Home Appliances, Allied Stores Corp., Federated Department Stores Inc., Ames Department Stores Inc. and Southland Corp. -- parent of 7-Eleven and High's Dairy Stores -- are struggling through bankruptcy reorganizations.

R.H. Macy & Co. and many others with hefty debt teeter on the edge of financial disaster. The sale of Kay Jewelers Inc., People's Drug Stores Inc. and Saks Fifth Avenue is creating uncertainty about their future direction.

Even the once-mighty Sears, Roebuck and Co. is watching profits drop. And flat revenue, delayed expansion and job layoffs are common throughout the trade.

With war raging in the Persian Gulf and the domestic economy stuck in neutral, these days Washington area retailers are backing gingerly into the future as they chart what to do next.

Interviews with a range of local merchants over the past month revealed a more cautious group that will be cutting costs, expanding less, striving to improve customer service, getting used to slimmer profit margins and watching carefully what -- and who -- will succeed in the 1990s.

And though somewhat chastened after last year's experiences, they also remain optimistic.

"I don't think any of us has ever experienced this kind of economic downturn ... retailing up to now has been a lot easier," said J. Warren Harris, chairman of the Hecht Co., one of the area's biggest department store chains. "But this remains one of the strongest markets in the country, the fundamentals of the economy are here and we count on that."

Plenty of Buying Power There's a lot to count on. According to Sales & Marketing Magazine's Survey of Buying Power 1990, the Washington area is one of the most affluent in the nation, with an after-tax income of more than $70 billion -- $52,435 per household. The 1.3 million households here spent $22,283 apiece in 1989 -- a total sales tab of $30 billion that was nearly double that of 1980.

The U.S. Census Bureau estimates that there were nearly 9,500 retail outlets -- excluding gasoline stations, auto dealers, and eating and drinking establishments -- here in 1982, and 12,300 five years later.

Today, observers estimate there are nearly 14,000 retail outlets, using almost 90 million square feet of retail space.

Newer and more meaningful retail statistics will not be available for years, but area retailers seem to have resigned themselves to much slower, more cautious growth in the near term.

"The customer definitely has the jitters these days and it's something that makes us all worried," said John Hechinger Jr., president and chief executive of Hechinger Co., the large-scale do-it-yourself hardware chain based in Landover. Though it retains overall financial strength, Hechinger recently said it would post its first quarterly loss ever.

"What is going on seems to be part of some massive overall change," said Andrew Stern, president of Stern's Office Furniture, a Capitol Heights-based chain operating in bankruptcy since last summer.

"I always thought consumers here were different, more stable, than other areas like New York or Boston, but it now seems we're more like them than I thought," Stern said.

Analysts agree with this assessment.

"Washington has been growing strongly but not quickly enough to absorb all of {the retail growth} without some pain being felt by the marginal retail players," said Peter Keefe, head of research at the Johnston, Lemon & Co. brokerage in Washington.

"Sure, we're affluent, but there are only so many consumers and so much money to spend -- and when the competition is fierce, you'll see trouble," Keefe said.

Perhaps a lot of trouble.

"What we are looking at is the excess of the '80s coming around to roost in the '90s and a winnowing-out process is going on," said David Nellis, who heads the Washington-based Nellis Dalberg management consulting group, which advises retail clients.

"Demand has grown arithmetically and retail space geometrically, so when you slice the pie so thin, something had to give and now it's giving," Nellis said.

The notion of an "overstored" Washington is frequently debated among analysts and retailers, but it is a difficult notion to evaluate.

Still, a quick perusal of the District, Maryland and Virginia shopping centers that have gone up in the past decade is instructive -- Georgetown Park, Hechinger Mall, Union Station Concourse, St. Charles Town Center, Ballston Common, Fashion Centre at Pentagon City, Village at Shirlington, Fair Oaks Mall, Reston Town Center, Potomac Mills, the Galleria at Tysons II.

And this does not include the many new strip shopping centers, the expansion of existing strip centers throughout the metropolitan area or the additions to "megamalls" like Landmark, Montgomery and Tysons Corner Center.

All the growth has meant an inevitable retail traffic jam, said Sheldon Fantle, former head of People's Drug Stores, whose Fantle's Drug Stores venture closed last year after being battered by heavy debt and market share declines. "Everyone is going to have to wait now while demand catches up to what is available," he said.

"There are simply more goods here than are needed and there has to be a shakeout," said Casey Willson of the Willson Co. retail consulting firm in McLean. "We've reached a plateau of number of stores that is going to exist for a while."

Back to the Basics That means a lot of fancy footwork to stay profitable, retailers said.

"We are definitely going back to basics and must deliver to the customers everything we said we would," said Susan Gorman, general manager of the Raleighs apparel chain. "Pleasing the customer is the buzzword."

To do that, for example, Gorman has organized a committee of customers -- most of whom had made complaints about the store -- to advise her on what the retailer could do to be better.

At his Crown Books and Trak Auto chains, Robert M. Haft is advertising more and lowering prices. "You have to be aggressive in a down market, because it's important to maintain your presence," Haft said. "A retailer has to fight hard in difficult times."

That means controlling costs -- employees, space and inventory -- moves retailers are making from Hecht's to the corner grocery store.

"We are trying to control what we can, like doing our best to keep inventory in line with sales," said John Whitacre, regional manager of the Nordstorm department stores in Washington. "That sounds simple, but being tuned in correctly is hard."

At Richmond-based Circuit City Stores Inc., declining same-store sales -- the best measure of a retailer's performance -- has caused officials there to watch things carefully.

"In the holiday period, for example, we hired less people ... and stores are now more closely monitoring inventory levels," spokeswoman Ann Collier said. "We're not going to have less selection available, but we are going to more efficient in handling it."

Hechinger thinks a more comprehensive effort is required. "Success means putting all the pieces -- price, service, selection -- together in just the right away," he said. "You cannot be weak in any area."

That will likely mean less expansion than in past years. Local banks report that the number of loan applications from retailers is down.

Kenneth Goldberg, a retail broker with the real estate leasing company Carey Winston, said most retailers lately are dampening expansion plans.

For example, Hecht's is opening two stores next year in far-off locations, and though Crown Books Corp. of Landover will expand its successful "superstore" concept, it will do so more cautiously than in the past.

And after scaling back its expansion from five new stores in 1989 to only two last year, Kitchen Bazaar, the specialty cookware chain, will expand selectively.

"We have become more conservative, we won't have expansion for the sake of expansion and we will only open stores that will be profitable," Kitchen Bazaar President Alan Shefter said. "But, I will add, we would also very much like to open more stores than we did last year."

Some stores are simply abandoning unprofitable locations. Camalier & Buckley, the specialty leather goods chain, is in the midst of closing some unprofitable locations.

Stern's Office Furniture already has cut back from nine locations to two, laid off employees and sold old warehouse space.

"We are stripping down to the essentials in our operation, keeping our expenses more flexible," Stern said.

"Having that overhead chugging along was okay while sales were increasing, but the name of the game now will be efficiently managing your expenses."

Emerging Patterns Exact formulas for success in retail in the next year are hard to pin down, but retailers think some patterns are already emerging. They say the focus will be on three major themes: value, service and an ability to have plenty of cash on hand to expand and improve.

"In a troubled economy the consumer looks for the best price, and the value image is a great one to have, " Fantle said.

"You have to keep service levels much higher than over before," said Larry Robinson, owner of the Royal Jewelers and Antwerp Diamond Centre chains.

"The stronger players with a lot of financial resources are going to take advantage of all the shaking out and make this a time to prepare for later growth," said Crown Books's Haft. "That kind of clout will be critical."

What that means for the Washington area, where retail sales have typically grown much faster than the rest of the United States, is unclear. For sure, there will be even more competition, including the entrance here soon of mass merchandiser Wal-Mart Stores Inc.

And though many predict more bankruptcy filings, they also see some great opportunities.

"As long as the federal government is here, we will never be just like Peoria," said Johnston, Lemon's Keefe. "We will always have a healthy retail environment."

"It is a time of opportunity for retailers, and market share is up for grabs," said Robert Pincus, president of the Washington Area Bankers Association and chief executive of Sovran Bank. "They just have to believe in this area."

Hecht's Harris said he does. "This will certainly be one of the first communities to return to economic improvement," he said. "We have the type of community that will allow us to do so, even if right now it's a buyer's market."