Trader Joe's is a very popular supermarket chain. According to a 2023 YouGov survey, it was the most popular grocery store chain in the U.S., beating out Aldi. Fans love its quirky products, low prices, and great customer service.
The company's popularity has made it a very successful grocery store operator. It rings up almost double the revenue per square foot compared to its competitors, driven by its smaller storefront and focus on stocking low-priced and interesting products that fly off the shelves.
Fans of Trader Joe's and interested investors might be wondering whether they can buy its stock to capitalize on its success. Unfortunately, that's not possible yet because the company hasn't completed an initial public offering (IPO). However, people interested in investing in the grocery stock have alternatives to consider while they wait in hopes that Trader Joe's will eventually go public.
IPO
Is Trader Joe's publicly traded?
Is Trader Joe's publicly traded?
Trader Joe's is not a publicly traded company. It's a private company owned by Aldi Nord, part of the Aldi Group, which owns the Aldi supermarket chain. Aldi Nord acquired Trader Joe's from its founder, Joe Coulombe, in 1979.
When will Trader Joe's IPO?
When will Trader Joe's IPO?
Trader Joe's didn't have an IPO on the calendar as of early 2024. The company likely won't go public anytime soon. It has been part of the privately held Aldi Nord since 1979 and has expanded steadily over the years without needing to tap outside investors to help fund its growth.
How to buy
How to buy Trader Joe's stock
You can't buy Trader Joe's stock or shares of its parent company, Aldi Nord. However, you can still invest in the grocery and retail sector, which is driving its growth. Three top grocery and retail stocks to consider are:
Costco
Costco (COST 0.9%) operates membership warehouses and e-commerce sites that provide members with low prices on many products, including groceries and household items. Costco has 600 warehouses in the U.S. and 872 locations overall.
E-commerce
The company's net sales totaled $237.7 billion in its 2023 fiscal year, a 6.7% increase from the prior year. Meanwhile, Costco is tremendously profitable, producing $6.2 billion in net income for the year.
Kroger
Kroger (KR 0.04%) is one of the world's largest food retailers. The company rang up almost $150 million in total sales during 2022 and had over 2,700 supermarkets and multidepartment stores.
Kroger operates several local grocery store banners, including Kroger, Ralphs, Harris Teeter, and Fred Meyer. Kroger could grow even bigger in 2024 after agreeing to merge with the country's second-largest grocery store operator, Albertson Companies (ACI 1.35%), in a $25 billion deal.
Walmart
Walmart (WMT -0.27%) is a behemoth in the retail industry. It provides lower-priced groceries and merchandise to more than 240 million customers and members yearly at its roughly 10,500 retail stores and e-commerce sites across 19 countries.
The global retail giant tallied over $600 billion in revenue during its 2023 fiscal year. The company's revenue will likely continue rising in 2024 as it grows sales at existing locations and adds new ones around the world.
Investors who want to buy one of Trader Joe's competitors can purchase shares in any brokerage account. Here's a step-by-step guide on how to invest in stocks like grocer Trader Joe's.
Step 1: Open a brokerage account
You'll have to open and fund a brokerage account before buying shares of any company. If you still need to open one, here are some of the best-rated brokers and trading platforms. Take your time to research the brokers to find the best one for you.
Step 2: Figure out your budget
Before making your first trade, you'll need to determine a budget for how much money you want to invest. You'll then want to decide how to allocate that money. The Motley Fool's investing philosophy recommends building a diversified portfolio of 25 or more stocks you plan to buy and hold for at least five years.
Buy & Hold Strategy
You don't have to get there all at once. For example, if you have $1,000 available to start investing, you might want to begin by allocating that money equally across at least 10 stocks and then grow from there.
Step 3: Do your research
It's essential to thoroughly research a company before buying its shares. You should learn about how it makes money, its competitors, its balance sheet, and other factors to ensure you have a solid grasp on whether the company can grow value for its shareholders over the long term.
Step 4: Place an order
Once you've opened and funded a brokerage account, set your investing budget, and researched the stock, it's time to buy shares. The process is relatively straightforward. Go to your brokerage account's order page and fill out all the relevant information, including:
- The number of shares you want to buy or the amount you want to invest to purchase fractional shares.
- The stock ticker (COST for Costco, KR for Kroger, and WMT for Walmart).
- Whether you want to place a limit order or a market order. The Motley Fool recommends using a market order since it guarantees you buy shares immediately at market price.
Once you complete the order page, click to submit your trade and become a shareholder in one of these leading retail stocks. Investors would follow a similar process to buy an IPO stock like Trader Joe's should it ever go public. If shares become available, fill out the order page at your brokerage account with Trader Joe's selected stock ticker and submit your trade.
Profitability
Is Trader Joe's profitable?
Trader Joe's is a privately held company, so it doesn't need to report its financial results publicly. However, all indications suggest that Trader Joe's is profitable.
It reportedly generates about $13 billion in annual revenue. Its stores produce more than $2,100 in gross revenue per square foot, almost double the average of rivals. Because the company generates such strong sales per store (albeit from a smaller average store footprint), it's likely more profitable than others in the grocery segment.
Trader Joe's would also have to be profitable to grow as briskly as it has been over the years, with more than 540 U.S. grocery stores in 2024. According to the company, it ranked "among the fastest growing" chains in the U.S. supermarket industry. It was investing heavily to continue expanding, something it couldn't afford to do if it wasn't consistently profitable.
Should I invest?
Should I invest in Trader Joe's?
You can't invest in Trader Joe's because it's a privately held company. However, you can invest in other grocery and retail stocks, like Kroger, Costco, and Walmart. While grocery stores traditionally have very low profit margins, they can be enriching long-term investments.
For example, Costco delivered a more than 22% average annual total return over the past decade, outperforming the S&P 500's 12.7% annualized total return during that period. Kroger and Walmart have also delivered solid total returns over the last decade (11.8% and 10.5%, respectively). So, if you want to make money by investing in the grocery sector, these stocks could help you achieve that goal.
ETF options
ETFs with exposure to Trader Joe's
Investing in individual stocks isn't for everyone, so many investors turn to exchange-traded funds (ETFs). ETFs enable them to passively invest in the stock market or on a specific theme, such as grocery and retail stocks.
Exchange-Traded Fund (ETF)
Since Trader Joe's isn't a publicly traded company, you can't use an ETF to gain passive exposure to its stock. However, you can use them to invest more broadly in the grocery and retail sectors. Two notable retail ETFs to consider are:
- SPDR S&P Retail ETF (XRT -0.21%): This ETF allows you to invest broadly across the U.S. retail sector. The fund had a relatively equal weighting to 76 retail companies in early 2024, including Costco (1.5% of its holdings), Walmart (1.5%), and Kroger (1.4%). It had a 0.35% gross ETF expense ratio.
- VanEck Retail ETF (NYSEMKT:RTH): This fund enables investors to focus on the top 25 U.S. retail stocks. Costco (8.8% of the fund's assets), Walmart (7.5%), and Kroger (2%) were all among its holdings in early 2024. The ETF also had a 0.35% expense ratio.
Related investing topics
The bottom line on Trader Joe's
Trader Joe's is one of the most popular grocery stores. Unfortunately, its fans can't invest in the supermarket chain and share in its success because it's not a publicly traded company. However, they can invest in the grocery sector, which can be a good long-term investment.
FAQ
Investing in Trader Joe's FAQ
Can you buy Trader Joe's stock?
No, you can't buy Trader Joe's stock. It's a private company owned by Aldi Nord, a German company that co-owns the popular Aldi stores.
Who owns Trader Joe's stock?
Aldi Nord, the German company that co-owns Aldi stores, owns Trader Joe's stock. It bought the company from its founder in 1979.
How profitable is Trader Joe's?
Trader Joe's doesn't publicly report its financial results, so we don't know for sure whether it's profitable. However, the company generates significant sales. It reportedly makes over $2,100 in gross average revenue per square foot in its stores, roughly double its competitors' numbers. Trader Joe's is likely quite profitable for a grocery store operator.
Why can't you buy Trader Joe's stock online?
You can't buy Trader Joe's stock online because it's not a publicly traded company. It's a private company owned by Aldi Nord, the German company behind the popular Aldi stores.
