NEW YORK - US ONLINE sales are expected to rise 8 percent this holiday season, with mass market retailers who can offer discounts performing best, according to Forrester Research Inc.

The research firm said on Monday it expects online retail sales in November and December to reach US$44.7 billion (S$62.6 billion) this year, up from US$41.4 billion a year ago, providing a bright spot to a retail industry that could see total sales fall.

'Despite the lingering effects of the global financial crisis, the online space remains the retail industry's growth engine,' Forrester said in its report.

Last year, total holiday sales logged their worst performance in nearly four decades after consumers cut back on spending in a global financial crisis. Online sales rose only 5 percent last holiday, breaking a multiyear streak of double-digit gains, according to Forrester.

This year, as consumers grapple with rising unemployment and decreased access to credit, retailers are gearing up for another tough holiday season. The National Retail Federation has forecast that total holiday sales will decline 1 per cent.

While online sales are expected to rise, they still account for a small portion of total holiday sales. Last year, holiday retail sales totalled US$441.97 billion, according to the NRF. -- REUTERS