Companies and Brands

How Much Would Trader Joe's Stock Be Worth if It Was Publicly Traded?

Eric Bleeker

Published: November 4, 2023 3:12 am

You can’t buy Trader Joe’s stock even if you waned to. Which sucks, because Trader Joe’s is one of the best chains in America!

That’s because Trader Joe’s is privately-owned. Yet, even knowing that Trader Joe’s doesn’t trade in the stock market won’t answer the question of just how valuable the company is. Let’s dive into the details of how much Trader Joe’s would be worth today – and how it compares to other major grocery stores.

How Successful is Trader Joe’s?

The most commonly cited figure for Trader Joe’s revenue is $16.5 billion. That comes from a 2021 article in Supermarket News that estimates Trader Joe’s revenue the prior year. Let’s put Trader Joe’s estimated 2020 sales in comparison to a few other major grocery stores.

Obviously, by this comparison Trader Joe’s doesn’t look relatively large. In 2020, it was the 23rd largest retailer in terms of food and grocery sales in the United States. However, there are some factors that make Trader Joe’s stand out.

First of all, Trader Joe’s averaged about $31 million in sales per store, which is impressive considering its stores average just 10,000 to 15,000 square feet in size. That’s a mere fraction other grocery stores which are often 50,000 square feet or more. Trader Joe’s stores produce about double the sales per square foot of even Whole Foods stores.

How To Value Trader Joe’s

The closest comparison to Trader Joe’s was Whole Foods, which we can use to estimate a value for Trader Joe’s.

Amazon acquired Whole Foods Market for $13.7 billion in 2017. Until that time, Amazon reported publicly financial information so we knew the company’s exact performance. In its last public filing, Whole Foods reported the following results:

• Revenue: $16.03 billion
• Cost of Goods Sold: $10.63 billion
• Selling, General & Administrative: $4.588 billion
• Operating Income: $749 million
• Net Income: $245 million

While Whole Foods is likely the best comparison to Trader Joe’s, there are some other publicly traded grocery stores we can also examine.

• Kroger Company: Is worth $32 billion as of late 2023 with sales of $148 billion and profits of $1.6 billion.
• Albertsons: Is worth about $12.6  billion in late 2023 with sales of $78.8 billion and profits of $1.37 billion.
• Sprouts Farmers Market: Is worth $4.3 billion in late 2023 with sales of $6.7 billion and profits of $253 million.

Sprouts is another interesting comparison to Trader Joe’s, as it uses smaller formats and is valued higher relative to its total sales. We’ll focus on Sprouts and Whole Foods for our valuation of the company.

How Much Would Trader Joe’s Be Worth if Publicly Traded?

We estimate Trader Joe’s would be worth about $20 billion if it was a publicly traded stock. 

Here are the inputs we used to arrive at this calculation.

• Revenue of $20 Billion Annually: Trader Joe’s revenue estimate in 2020 was $16.5 billion and it was growing at about 8%, we took its growth rate in the next three years down to 7% annualized to arrive at 2023 revenue of around $20 billion.
• Operating Profit of $1.4 Billion: Grocery stores have notoriously thin margins. We estimate that Trader Joe’s operates at peak efficiency in the industry. The highest operating margins Whole Foods achieved was slightly below a 7% operating profit in 2013. We assumed that Trader Joe’s operates at a 7% operating margin, which is about $1.4 billion in operating profit per year.
• 14X Operating Profit Valuation: Finally, we compared Trader Joe’s to Sprouts Market for a valuation off its operating margin. Sprouts Market trades for about 11X its operating profit. Since we estimate Trader Joe’s has higher margins and a premium brand, we bumped it up to a trading at 14X its operating profit.

When you combine $1.4 billion in operating profit and multiply it by 14X, you get a valuation of $20 billion for Trader Joe’s. That’s a 43% premium relative to the price Whole Foods was purchased for by Amazon in 2017.

Who Owns Trader Joe’s Today?

The reason you can’t buy Trader Joe’s is that it was owned by Theo Albrecht until his death in 2010. At that time his ownership in the company passed down to his heirs. Perhaps Trader Joe’s will go public one day, but with the company appearing to be extremely profitable, it’s unlikely the family has any incentive to sell the company or publicly list it.