DSG International, Europe's No. 2 electricals retailer, posted much better-than-expected Christmas sales, stoked by strong demand for laptops, large screen televisions and food mixers.

DSG, which runs the Currys and PC World chains in Britain, said on Thursday sales at stores open at least a year increased 8 percent in the 12 weeks to January 9.

That compares with analysts' forecasts for an increase of 2-3 percent, according to a company poll of analysts, and a rise of 1 percent in the eight weeks to October 17.

DSG, which also runs UniEuro in Italy and Elkjop in Nordic countries, said gross margins were down 0.8 percent, reflecting a strategy to drive sales through the peak trading period.

DSG is one-and-a-half years into a turnaround plan that focuses on cutting costs and stocks, selling-off underperforming businesses and revamping stores.

The firm said it was on track to deliver 50 million pounds of cost savings in its year to end-April 2010.

In common with a raft of other retailers DSG is cautious on the outlook for 2010.

"Looking forward, we expect 2010 to be tough across Europe and notably in the UK given the economic environment," said Chief Executive John Browett.

Shares in DSG have nearly doubled over the last six months, outperforming a 41 percent rise in the general retailers index.

The stock closed Wednesday at 37.5 pence, valuing the business at 1.35 billion pounds.

On Tuesday a survey said retail like-for-like sales rose by a better-than-expected 4.2 percent in December, while Metro (MEOG.DE), Europe's No. 1 electricals retailer, posted a 3.4 percent fall in fourth quarter sales.