As consumers start reacting to signs of an economic slackening, watch for retailers to feel their pain. The National Retail Federation, the industry's leading trade group, predicts that sales growth will slow--from a 5%-to-6% pace in 1998 to a 4%-to-5% rate this year. Merchants say they were already expecting the shift, having been tipped off by a slowdown during the second half of 1998. "We're not negative," says Marvin J. Girouard, CEO of Pier 1 Imports Inc. "But we're not stupid, either. We're practical enough to know this boom can't last forever."

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