UPDATE 1-Wal-Mart expanding inventory-tracking technology

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NEW YORK, May 1 (Reuters) - Wal-Mart Stores Inc. (WMT.N: Quote, Profile, Research) said on Tuesday it is expanding its electronic inventory tracking capabilities and an additional 400 Wal-Mart stores will be RFID-enabled by the end of this fiscal year. The world's largest retailer has been pushing radio-frequency identification, or RFID, chips as a means to lower distribution costs, reduce theft and keep it in stock on merchandise.

The chips, which hold information like a product's price or location, transmit radio waves to electronic readers so merchandise embedded with the chips can be scanned remotely.

But RFIDs adoption has stalled as critics contend the technology is expensive and could compromise consumer privacy if retailers use it to track purchases after shoppers leave the stores.

Wal-Mart is requiring its main suppliers to integrate the technology by placing tags on cases of goods so they can be scanned and located more easily.

"We have only gotten started, and we are continuing to roll out to more stores at the same rate as the last two years," said Wal-Mart Chief Information Officer Rollin Ford in a statement.

He said RFID has cut excess inventory in its supply chain and reduced the times it is out-of-stock on an item.

((Reporting by Nicole Maestri, editing by Deborah Cohen; Reuters Messaging: nicole.maestri.reuters.com@reuters.net;

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