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Tesco stocks up on RFID tags

The European supermarket giant signs a deal to pick up 4,000 readers and 16,000 antennae.

Tesco has placed a major order for RFID readers and tags.

The European supermarket giant has signed a deal with Parsippany, N.J.-based ADT Security Systems, which will supply the 4,000 readers and 16,000 antennae by the fall of this year.

The equipment will be used in 1,300 Tesco supermarkets and 35 distribution centers in the United Kingdom.

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Mega-chain's demand that
suppliers use radio tags
will help double sales,
analyst report predicts.

Tesco is planning a wider introduction of the technology and may eventually use RFID in its international business.

Although Tesco has tested item-level tracking at two of its stores, with razor blades and DVDs, the new deal will see the equipment fitted onto dock doors and merchandise receipt points, and will be used to trace cases and pallets of goods, rather than individual items.

A new report from Larstan Business Reports, which surveyed more than 600 supply chain and IT executives, describes the retail sector as a "major driving force in the adoption of RFID."

Larstan said that 35 percent of the companies questioned said they had already implemented advanced infrastructure to support RFID deployment.

According to the survey, retailers are also more convinced of the advantages of the technology--83 percent of retail businesses said they agreed or strongly agreed that having partners and suppliers use the technology would benefit them. By comparison, 68 percent of manufacturers responding to the survey and 50 percent of logistics and transportation companies feel RFID would benefit them.

But while the companies queried might have been enthusiastic about using the technology in the supply chain, 78 percent of retailers also predicted it would mean significantly overhauling their infrastructure.

Unsurprisingly, with RFID deployments bringing the need for re-engineering, 94 percent of the retailers said they demand a quick return on invesment.

For the retail sector, it seems, while RFID may generate a lot of enthusiasm, it doesn't seem to be generating many concrete rollout plans--just 5 percent of retail companies surveyed are planning to implement the technology within the next three to six months.

Jo Best of reported from London.