DSG International has reported like-for-like sales up 8% in the 12 weeks to January 9 with a record-breaking Christmas in the UK in key categories.

The electricals giant has smashed City expectations, with most analysts forecasting an increase of around 3%.

Underlying group sales were up 11% in sterling and the retailers reported a good performance across all categories, particularly UK electricals, Nordics, e-commerce and in Italy.

In the UK and Ireland, its electricals arm grew like-for-like sales by 8%.

In the UK, record breaking categories included TVs, PCs and white goods. DSG sold a computer and TV every 2 seconds over Christmas, and all the megastores reported sales over £1m each in the first week of the Sales.

Chief executive John Browett said: “Customer response to Christmas and the Sale has been even better than we expected with strong demand across all the categories and countries. This performance reflects the benefits of the actions we are taking to revitalise the business as part of the Renewal & Transformation plan, with particularly pleasing performances in our Megastores and 2-in1 stores.”

Gross margins across the group were down 0.8% year-on-year, driven by the group’s decision to drive sales through the peak period as well as product and market mix.

DSG said all new format stores delivered consistent gross profit uplifts, and it is on track to deliver £50m of cost savings this year as part of the £200m four-year cost saving programme.

DSG said it had very good product availability over the Christmas period with stock turn up over 10% year-on-year.

Browett added: “Looking forward, we expect 2010 to be tough across Europe and notably in the UK given the economic environment. However, we expect to continue to benefit from the self help of our Renewal & Transformation plan and continue to build solid foundations for future growth.”

DSG has entered into a period of consultation with its UK defined benefit pension scheme members to close the scheme to future accruals.