Wal-Mart will stop using generation-one radio frequency identification tags by the end of June.
The US retailer is the world's biggest user of RFID tags. It is 18 months into a trial with 200 of its main suppliers, which have been mandated to tag pallets of goods.
Second-generation RFID technology is expected to be ratified as a global standard by the International Standards Organisation. The tags can be read from greater distances and at faster speeds than earlier tags, but the biggest advantage to Wal-Mart will be if wider use of the tags causes their price to fall.
However, Jeff Woods, research vice-president at analyst firm Gartner, said Wal-Mart had yet to prove the business case for RFID. "What it has largely not answered to date are the business case questions," he told Computer Weekly.
A Wal-Mart spokesman said, "We disagree. Yes, the benefits are not quantified in trials, but we feel we and our suppliers will benefit significantly from RFID."
Wal-Mart CIO Rollin Ford, said, "RFID will transform the way we do business."