Is TSCO.L (Tesco PLC) Halal or Haram?

Based on our AAOIFI-standard shariah screening, TSCO.L is classified as Doubtful. It passed 3 of 4 compliance screens. Some scholars may permit investing with income purification, while others advise avoiding it. We recommend consulting a qualified Islamic scholar before investing in TSCO.L.

Tesco PLC is the dominant force in the UK grocery market, operating nearly 4,800 stores across the UK, Ireland, and Central Europe. Beyond its supermarkets and Express convenience stores, the company has diversified into wholesaling through Booker and financial services via Tesco Bank, offering credit cards, loans, and insurance. It remains a household name, serving millions of shoppers weekly with everything from fresh produce to F&F clothing. For Muslim investors, Tesco currently presents a challenge as it holds a 'Doubtful' status under AAOIFI standards. While the core business of selling food and household goods is inherently Halal, the company fails the financial health screen due to excessive leverage. specifically , its interest-bearing debt relative to its market cap sits at 48.0%, well above the permissible 33% limit, signaling a heavy reliance on conventional borrowing. Despite failing the debt screen, Tesco performs well in other areas , with cash and securities accounting for only 15.2% of its market cap and impermissible interest income remaining very low at 0.36% of total revenue. This low interest income figure suggests that while Tesco Bank exists , it is not the primary driver of group revenue compared to retail sales. However, until the company significantly reduces its debt burden, strict Shariah-compliant funds would likely exclude this stock from their portfolios. Tesco PLC operates in the Consumer Defensive sector under the Grocery Stores industry and is headquartered in Welwyn Garden City, GB. The company is led by CEO Ken Murphy and employs approximately 340,000 people.

TSCO.L was screened using AAOIFI-based shariah compliance criteria. Four tests are applied: (1) Business Activity — the company's core business must not derive primary income from haram (prohibited) activities such as alcohol, gambling, tobacco, or interest-based finance. (2) Debt-to-Market-Cap — total debt must not exceed 33% of market capitalization. (3) Interest Income — interest income must not exceed 5% of total revenue. (4) Cash & Securities — cash and interest-bearing securities must not exceed 33% of market cap. TSCO.L passed 3 of these 4 screens.

TSCO.L was last screened on 2026-03-01. Shariah compliance status can change as companies report new financial data, acquire new businesses, or shift revenue streams. We recommend checking back periodically for the most up-to-date screening results.