Retail stocks in the U.K. have seen a spike in short-selling since the start of the year, as investors bet against some of the biggest names on main street amid the "all-conquering" rise of online shopping, according to financial research firm Markit.
The research firm has spotted that retailers have seen the second-highest jump in short interest for U.K. stocks this year. Short-selling is an investment tactic where a speculator borrows a financial instrument, such as a stock, and sells it in the hope of buying it back later at a lower price, thereby making a profit.
"Of the FTSE 350 retail oriented shares, investors seem most bearish about the food and staples end of the market, with the sector seeing three times the average demand to borrow than the overall index," Simon Colvin, a research analyst at Markit said in a note on Tuesday.
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Two of the U.K.'s top supermarkets have spurred this demand to borrow, according to Colvin. J Sainsbury - the U.K.'s third biggest supermarket in terms of revenue after Tesco and Wal-Mart's Asda - reported slightly higher like-for-like sales for the third quarter on January 8. While the group's chief executive, Justin King, said the Christmas period had been the group's "best Christmas ever", he warned that he expected consumers to "spend cautiously" at the start of 2014.