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A grocery store that practically reads your mind

Published January 13, 2004

[Metro Group photo]
A computer that scans items as they're placed in a cart keeps track of purchases -- as well as a shopper's personal buying history.

NEW YORK - This store doesn't need a conveyor belt at the checkout counter.

Each shopping cart comes equipped with a computer so customers can scan in purchases as they load up. The smart cart also knows what you've bought at the same store before. Its computer can display custom-tailored coupon offers, trigger TV ads beamed on plasma-screen monitors as you pass by and chart a path to items you cannot find.

Scales in this store not only weigh and price produce. Thanks to digital cameras, they can distinguish a potato from a pomegranate, then spit out the proper price tag.

Retailers have talked for more than a decade of such innovations, but this Future Store is no longer science fiction. It opened last April in Rheinberg, Germany, near Dusseldorf.

"It works," said Zygmunt Mierdorf, chief information officer of Metro Group, the world's fifth largest retailer. "Consumer acceptance has exceeded our expectations."

The Metro Group set up a working 14,000-square-foot version of its Future Store for inspection at the National Retail Federation convention here Monday.

Now, Metro and its more than 40 partners in the technology and food businesses - ranging from Intel to IBM, from Microsoft to SAP and from Kraft to Nestle - have to figure out how to make the store pay the undisclosed millions spent developing the technologies.

And backers of the new technology are taking concrete steps to put it in place, starting with computer chips that could eventually replace today's bar codes on every item in a store.

Metro said Monday it is joining the world's largest retailer, Wal-Mart Stores Inc., in requiring their biggest suppliers to start using the RFID chips (short for Radio Frequency Identification) beginning next year.

Many of the Future Store's features require in-store antennas, transmitters and wireless devices. But one of the keys to making the investment profitable requires that suppliers embed the tiny RFID computer chips in products, pallets and cases so they can be tracked from factory to customer.

One big impediment until now has been Big Brother privacy fears. Critics say the chip attached to a package of Gillete Mach III razors could keep beaming its location all the way to the buyer's home, paired with his name and address that's in the store's computer database. And the chip attached to a coat or jacket even could be tracked to reveal the user's visits to a bank, a shopping mall or a strip club. But proponents say that's not a likely scenario because the establishment would have to be equipped with RFID antennas to pick up the signal.

Still, to assuage such privacy fears, Metro added an extra computer terminal at the store exit. Shoppers can de-activate the chip inside each product one at a time if they don't want their purchases tracked beyond the store's exit.

So far only three of the 30,000 items sold at Future Store have RFID chips inside, in part because of cost. It's come down to about 50 cents apiece, but retail experts say it will need to be pennies per chip before the tags become commonplace on products. For now, the Future Store still uses conventional bar codes.

Initially, Wal-Mart and Metro are planning to attach the chips only to pallets and cases to track shipments from the manufacturer to the store shelf.

Promoters of RFID have pressured other retailers to buy into RFID chips because Wal-Mart is. If they don't get on the bandwagon, giant Wal-Mart will leave them in the competitive dust, they say.

Lee Scott, president and chief executive officer of Wal-Mart, said his company wants its 100 top suppliers using RFID tags on cases and pallets next year. He estimated that by keeping closer track of its inventory Wal-Mart could save "billions and billions" of dollars on inventory it would not have to store in warehouses.

"We've had some resistance from suppliers, but it's really no different than when we got them to buy computers so they could monitor their day-to-day sales trends in our stores for the first time," he said. "It's not like we'd stop doing business with them if they didn't make it."

- Mark Albright can be reached at or 727 893-8252.

[Last modified January 13, 2004, 01:33:02]

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