Amazon Cuts Path of Destruction

The U.S. economy may be struggling to shake off the recession as it enters the 2009 holiday season, but online retailers such as Amazon(AMZN Quote) look set to shine through the gloom.

Despite some positive noises in the broader economy, retail is still licking its wounds after a tough 12 months. The National Retail Federation, for example, has forecast a 1% year-over-year decline in sales this holiday season, as ongoing uncertainty about job security and housing takes its toll on consumer confidence.

In contrast, a report released this week by analyst firm Forrester predicts a healthy shopping season for online retailers. Forrester forecasts online retail sales of $44.7 billion between November and December, an 8% increase on the same period last year. Not bad considering the events of the last year or so.

"Despite the lingering effects of the recession, the online space remains the retail industry's growth engine," said Forrester analyst Sucharita Mulpuru, in the report. This makes perfect sense, particularly at a time when consumers are still nervous about spending cash.

Amazon, which recently enjoyed a massive third-quarter sales and profit hike, has been one of the stars of this earnings season.

The Seattle-based retailer has become an Aladdin's cave for the Web generation. After making its name shipping books around the globe, Amazon has successfully branched out into multiple product lines. The Kindle e-book, for example, was Amazon's bestselling item by both unit sales and dollars during the quarter, which bodes well for the holiday season.