The One Retail Stock to Buy that Will Survive the December Slump

As Main Street gears up for the holiday shopping season, the retail sector takes center stage on Wall Street.

The bad news for those investing in retail stocks: Morgan Stanley cautions overall retail sales growth is expected to be the weakest since 2008 - meaning the sector's robust 40% year to date could be headed for a slowdown.

Weighed down by concerns over pay and hiring, consumer confidence continues to fall, suggesting consumers will continue to be tight-fisted. After a steep drop in October, the consumer confidence level fell further in November. Slipping to 70.4 from 72.4, it marks the lowest level in seven months, Tuesday's Conference Board data revealed.

A big challenge is the lateness of Thanksgiving this year, which cuts the holiday shopping season short by a week. The last time Thanksgiving fell so late on the calendar was 2002.

The National Retail Federation says shoppers will shell out slightly less this year. According to the retail group's annual survey, the average shopper will spend $738 on holiday gifts, down about 2% from the average $752 spent over the 2012 holidays.

With the holiday season accounting for as much as 40% of the industry's annual sales, retailers took action with Gray Thursday.

Many of the nation's biggest retailers including Toys R Us, Best Buy Co. Inc. (NYSE: BBY), J.C. Penney Co. Inc. (NYSE: JCP), Macy's Inc. (NYSE: M), and Target Corp. (NYSE: TGT) will open on Thanksgiving evening. They'll featuring overnight sale marathons that run through Friday.

Some analysts say this is an act of desperation, that retail is struggling so much it's willing to cut into family time to make a sale.

That's why retail stocks' year-to-date gains - which have beat the S&P 500's 26.54% - will hit some headwinds in the year end.

According to Bespoke Investment Group, retail stocks typically underperform during the final months of the year. Generally, the sector sees its yearly high shortly after Thanksgiving, while the S&P 500 experiences its peak at year's end.

But there's one retail stock to be bullish about, and that's due to its #1 position in a still-growing sector...

One Retail Stock to Buy Now

You see, bucking the seasonal trend of retail stock trouble is the Internet.

Data from 2000-2012 shows web retailers logged average gains of 3.9% over the period, posting positive returns 73% of the time. Credit the growing infatuation and ease of online shopping.

"I think online shopping is always going to be moving higher," Money Morning Capital Wave Strategist Shah Gilani told FOX Business' Stuart Varney Wednesday morning. "I think that's the direction of retail in the future."

And there's one undisputed Internet retail winner: Amazon.com Inc. (Nasdaq: AMZN).

Amazon.com is the world's largest online retailer and has come a long way from its inception as an online bookstore. The company now sells everything from apparel to furniture to food to jewelry to electronics.

Its Kindle e-reader is the bestseller in the group and tops many holiday gift lists. Market research company Forrester estimates some 167 million shoppers will buy gifts online this holiday season. Research firm Adobe Digital Index predicts online sales will be highest this year, coming in around $2.27 billion.

The web merchant stands out not just for its imposing size, but also because it offers so many sweet deals. It has grown to become the bargain online retailer of choice.

Amazon has a huge advantage of other retailers in that it can also be considered a tech stock.

"If you take away the retail component and look at what Amazon does to serve the retail public, you'll see it has massive infrastructure systems in terms of technology," said Gilani. "That's all going to be used for cloud computing later. Amazon is setting itself up to be a homerun hit in terms of technology."

Want to get more on the inside scoop on which stocks to buy now? Don't miss this recent hint to a 200% gainer, which our Defense & Tech Specialist Michael A. Robinson profiled last week: Bank 200% Gains from My Recent Dinner Conversation

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