Is Costco Stock Halal? Membership Warehouse Under the Islamic Screen

Quick Verdict

Costco (COST) is generally considered DOUBTFUL to NOT COMPLIANT. Like Walmart and Target, Costco sells alcohol, tobacco, and pork products. Costco is actually known for its extensive alcohol department, particularly wine and spirits.

Why Costco Is Different From Walmart

Costco's business model has a unique feature: membership fees account for ~2% of revenue but ~73% of Costco's operating income. This means Costco's profit comes primarily from membership fees (neutral) rather than product sales.

Some Islamic scholars use this to argue that the haram product revenue, when looked at as a proportion of profit rather than revenue, is actually very small. Under this interpretation, Costco might pass.

However, the more conservative and mainstream approach looks at revenue (not profit) for the haram percentage calculation, which leads to a different conclusion.

Alcohol Revenue at Costco

Costco is one of the largest wine and spirits retailers in the United States. Its Kirkland Signature wines and spirits are bestsellers. Some estimates suggest alcohol represents 5-8% of Costco's food and sundries revenue — potentially approaching or exceeding the 5% threshold on its own.

Financial Screening

• Debt / Market Cap: Very low (~3%) ✅
• Interest Income / Total Revenue: Under 1% ✅
• Alcohol Revenue / Total Revenue: Estimated 3-6% ⚠️

Screening Agencies' Verdict

• Zoya App — Questionable / Not Compliant ❌
• MSCI Islamic Index — Excluded ❌
• SPUS ETF — Not held ❌

Bottom Line

Costco is a great business but a difficult investment for Muslim investors under mainstream screening. Its alcohol sales are a core part of the shopping experience. If you want retail exposure, look at e-commerce companies or specialty retailers that don't sell alcohol, tobacco, or pork products.