Tesco says it is the first retailer in Europe to start an in-store trial of new 'smart tag' technology that could revolutionise the way products are manufactured and sold.

The supermarket begins the trial of radio frequency identification (RFID) chips this month in partnership with Gillette, at its Newmarket Road shop in Cambridge.

The smart chips - the successor to bar codes - can be read wirelessly by a scanner, allowing products to be monitored throughout the supply chain.

The tiny tags will be attached to packs of Mach3 razor blades. Staff will be able to instantly check stock levels, sell-by dates, and whether a product has been paid for.

The tags could also help to beat shoplifters - scanners can detect if a product has been paid for when it leaves the shop.

'The possibilities with RFID are endless. Tagging products will lead to real improvements for customers and staff with instant information and improved availability,' Tesco IT director Colin Cobain told Computing.

If the three-month trial proves successful, the tags could feature on a wide range of Tesco products in the future.

'In time we will see RFID chips on food products, so we will know when products on-shelf are approaching their sell-by dates. It will make identifying products a lot easier, allowing our staff to spend more time with customers,' said Cobain.

Gillette is investing in a mass trial of RFID technology, which could lead to the company buying half a billion chips to track its products through the supply chain.

'The tags are an enormous management tool. Barcodes are useless in the supply chain because they need human intervention,' said Gillette's director of external relations Paul Fox.