This measured approach to international rollouts reflects the reality that the technology is not simple to deploy under any conditions. International rollouts are complicated by varying regulations governing the use of the ultrahigh-frequency spectrum and differences in supply chains, relationships with suppliers, privacy laws and other issues.

Still, it's likely that other retailers around the world will scrutinize Wal-Mart's pilot in Canada. They know that Wal-Mart has focused on international expansion in recent years. In December, Wal-Mart acquired a majority interest in Seiyu, a leading Japanese retail chain with 405 stores. The same month, Wal-Mart announced the acquisition of 140 Sonae stores in Brazil. And Wal-Mart Canada confirmed the company would build new stores next year.

Last September, Wal-Mart purchased a one-third interest in Central American Retail Holding Co. (CARHCO), with 363 supermarkets and other stores in Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua. In March, Wal-Mart increased its interest to 51 percent and changed CARHCO's name to Wal-Mart Central America. Wal-Mart also announced that it plans to open 230 new international stores by Jan. 31, 2007.

Wal-Mart International operates more than 2,650 retail stores and employs more than 500,000 associates in Argentina, Brazil, Canada, China, Costa Rica, El Salvador, Germany, Guatemala, Honduras, Japan, Mexico, Nicaragua, Puerto Rico and the United Kingdom. The retailer doesn't have a dominant position in any international retail market, the way it does in the United States. But Wal-Mart's international stores purchase goods in 70 countries, so the introduction of RFID in its international supply chain could give it a competitive advantage in overseas markets and improve the profitability of these operations.

One thing is clear: If Wal-Mart starts to roll out RFID internationally, it would spur adoption among local suppliers and encourage other retailers in those markets to begin exploring the technology. Loblaw Companies—Canada's largest food distributor and a provider of general merchandise and drugstore products—has already launched an RFID pilot.