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Tesco is dipping its toes in spy-chip waters again, despite suffering a storm of bad publicity when it tried attaching RFID chips to Gillette razors in July 2003. Britain's biggest supermarket chain ran a trial in Cambridge which took a picture of anyone who took a pack of razor blades from the shelves Gillette Mach3 razor blades are among the western world's most shop-lifted items. A pallet-load of blades costs as much as a new Ferrari. Consumer and privacy groups were less impressed with the trial, which was abandoned amid calls for a boycott of the store.

Today's announcement is that Tesco will attach RFID chips to pallets and cases rather than to individual items. The chips will be attached to pallets containing higher value electrical items like hairdryers.

The chips will contain supply-chain information and should give Tesco a clearer view of its inventory. Pallets and cases are "read" automatically as they leave the warehouse and again as they go into stores. The advantage over bar codes is that reading an RFID chip does not require clear line of sight. There are still difficulties with the accuracy of the readings but RFID readers fitted to a warehouse or store door should be able to keep track of all pallets carried through it.

This will now be rolled out to 12 distribution centres serving 100 stores. Complete rollout is expected by summer 2005.

A spokesman said suppliers would not be affected at this time because the chips will be attached once the products are delivered to Tesco's distribution centre. US retailer WalMart has been criticised for forcing its suppliers to adopt RFID chips. ®

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