Sainsbury’s has overtaken all other listed companies to become the most shorted stock in the UK, with hedge funds betting heavily against the supermarket amid mounting concerns over an industry-wide price war, according to a report by the Telegraph.
According to the Financial Conduct Authority (FCA), almost 7% of Sainsbury’s shares are currently held in disclosed short positions – the highest level across the London market.
London-based hedge fund Ilex Capital, founded by ex-Citadel traders David Sutton and Jonas Diedrich, has been among the most aggressive, lifting its short to around £182m, up from £125m in July. Other managers including AKO Capital and Man Group also hold significant bearish positions, FCA data shows.
The moves reflect investor unease over intensifying competition in UK grocery retail. Asda’s aggressive discounting strategy has raised expectations of a prolonged price war, which could erode margins for rivals such as Sainsbury’s.
Despite hedge funds’ conviction, the retailer’s shares are up 11% year-to-date and recently reached their highest level since 2021. Sainsbury’s has also posted its strongest grocery market share in nearly a decade, prompting some analysts to question whether hedge funds are overplaying the downside case.
