Wal-Mart demands double RFID chips with groceries

Company says 500 new stores, clubs to roll out tech for case- and pallet-level tracking before end of fiscal year.

Jo Best Special to CNET News.com
Radio frequency identification pioneer and corporate monolith Wal-Mart Stores is speeding on with its use of the track-and-trace technology.

It announced Tuesday that 500 new stores and clubs will introduce RFID for case-level and pallet-level tracking before the end of the fiscal year, doubling the number of locations using it.

The new deployments will all use tags based on the Gen 2 RFID standard. All Wal-Mart's other RFID-enabled locations, which use first-generation chips, will be converted once all pallets bearing Gen 1 tags have made their way through the system.

Wal-Mart is also doubling the number of suppliers that will use RFID, with its next 300 largest suppliers committed to having tagging systems live by the start of next year.

The world's largest retailer raised eyebrows and hackles among some after mandating that its top 100 suppliers had to install the technology by the start of last year.

However, Wal-Mart's Chief Information Officer Rollin Ford says the chain is only at the tip of the iceberg in terms of benefits. After hiring researchers from the University of Arkansas to look into the advantages of using RFID, Wal-Mart found over-orders dropped by 10 percent and out-of-stocks plummeted by 16 percent.

Ford added in a statement that the megagrocer is "actively engaged in designing some new initiatives that will accelerate our program even further" and is "aggressively moving forward with deployments."

Jo Best reported for Silicon.com in London.