Josh McHugh in Wired has a feature on RFID chips in supermarkets. He describes his visit to the Future Store built by European retailer Metro to be the premier live testing ground for RFID tags.

Thanks to the coordinated efforts of the world's biggest retailers and manufacturers, not to mention the persistence of former lipstick marketer Kevin Ashton, these little tags are about to infiltrate the world of commerce. Depending who you ask, RFID tags constitute:

1. the best thing to happen to manufacturing since the cog.
2. the biggest threat to personal privacy since the crowbar.
3. the near-exact fulfillment of the Book of Revelation's description of the mark of the beast.

There's a compelling argument for each of these perspectives - including number three.

He explains why manufacturers and retailers alike are so eager to implement RFID technology. It is mostly about the supply chain margins.

Retailers are even keener to get their hands on the sort of information RFID tags promise to reveal. The way it works now, all the little kinks along the supply chain accumulate in the lap of retailers, which take delivery of products without knowing whether the shipments are correct until they're unpacked. The average rate for shipping screwups is 1 in 20. That's a big part of why margins in the retailing business are so thin - average net profit for supermarkets is 1 percent - and precisely the reason that Wal-Mart, Target, and Metro have given their top suppliers six to nine months to start slapping RFID tags onto crates and delivery pallets. Manufacturers want this technology, but retailers need it.

RFID will be good for the customer too. Shopping will be much easier and the information gathered about their shopping behaviour will result in a closer match between demand and supply.

There is more, especially on the argument opposing RFID that we have written about here already. It is worth reading the whole thing.