enlarge John Patriquin/Staff Photograher

Tim and Andrea Hill of Stow, Mass., and daughter Madalyn, 4, shop at Treehouse Toys in the Old Port last week.

Maine retailing has undergone a rapid expansion in the last five years, with the area around the Maine Mall in South Portland filling in and major new shopping centers popping up in Biddeford and Augusta.

The idea that Maine has a big enough retail market to support all those new stores will be severely tested in the next few months if consumers, as expected, curtail their spending because of a rocky economy and high fuel prices.

Economists are especially concerned by signs indicating that consumers are pulling back on their spending as the economy slows. The 2001 recession, they note, was probably milder than it could have been because consumer spending continued to grow during the period, softening the downturn. Combining slower spending with a contracting economy could lead to a longer economic contraction and less robust recovery.

For now, the retail segment is "holding its own," said Jim McGregor, executive vice president and director of government affairs of the Maine Merchants Association.

Maine retailers generally reported that holiday sales were up over 2006, but not as good as was expected, McGregor said -- which doesn't offer much of a key to what might happen in the first half of the year if the economy slips into a recession.

McGregor said most retailers that opened a store or stores in the state recently probably factored the possibility of a recession into their expansion plans. To him, the fact that they went ahead suggests that they believe they can weather a downturn.

One hopeful factor is rebates that will be coming in a few months from the federal government, McGregor said. The rebates will give individual taxpayers at least $600, $1,200 for couples and more for families with children. Retailers expect consumers will use the money to make purchases they have put off or even splurge on something they hadn't planned on buying, he said, providing the kind of stimulus it was designed to deliver, particularly for retailers.