Investor positioning in the European retail sector has shifted subtly but meaningfully over the past month, according to a new UBS analysis, with Tesco PLC (LSE:TSCO) and Next PLC (LSE:NXT) particular favourites.
The bank’s crowding framework – which emphasises changes in positioning over one- and three-month periods – shows investors leaning more toward buying rather than betting against the stocks, with food retailers seeing the most pronounced improvement in support.
Food names screen more positively than a month ago, UBS says, with Tesco emerging as the most crowded long and Ahold Delhaize close behind.
Baked goods retailer Greggs PLC (LSE:GRG), by contrast, remains the most crowded short.
Fashion retailers show a softening of negative sentiment: positioning is now less bearish, with Next the most crowded long.
Primark parent Associated British Foods PLC (LSE:ABF), meanwhile, is the most crowded short among clothing chains.
Hardline retail has seen positioning become less positive overall, though Dunelm Group PLC (LSE:DNLM) still scores constructively while Kingfisher PLC (LSE:KGF) registers modestly negative.
UBS also highlights divergences between long-only managers and hedge funds, noting distinct subsector skews in the latest data.
Next is seen by investors as a "quality at any price" stock, according to a quantitative tool used by UBS to monitor how a company’s investment 'style' shifts over time.