The trading update for the crucial eight-week period follows two previous disappointing Christmas announcements.

Dixons, which trades as Dixons, Currys, PC World and The Link, increased its promotions and advertising over the recent holiday season.

It said sales in the period met expectations, and that Dixons Group had enjoyed a "solid" first half-year.

'Challenging market'

The group enjoyed strong demand for flat screen TVs and digital cameras, and forecast a "satisfactory" outlook over the whole year.

Group first-half pre-tax profits were �105.7m, up from �97.1m.

Over Christmas the group's total like-for-like sales, including overseas, rose by 5%.

Chairman Sir John Collins said: "The group achieved solid results in the first half year, with good sales and profit growth in a challenging retail market.

"Performance in the UK has improved throughout the period and our international businesses have continued to make good progress."

He said the group had also been "encouraged" by the Competition Commission investigation into the sale of extended warranties, which could hit the company's profits.

A company statement said: "The final recommendations reflect many of the group's longstanding policies and practices governing the sales of extended warranties.