A US consumer privacy group has called for a global boycott of Tesco stores over the company's trial of Radio Frequency Identification (RFID) chips.
Tesco says the trial will benefit its customers
The technology allows products to be tracked via radio waves.
Privacy groups have labelled them "spy chips" because they fear the tags attached to products, can be used to track the behaviour of customers.
But Tesco said the tags, being trialled on high value items in 10 stores, were only to help its distribution process.
"Suggestions that Tesco might use this technology to track products once they have been purchased, thereby invading customers privacy are simply wrong, in fact it would be illegal in Europe," a Tesco spokeswoman told the BBC's Newsnight programme.
"The radio barcode is only activated when in close proximity to the reader located in the store or distribution centre."
Up to now the Tesco has used RFID chips on cases of non-food items at its distribution centres.
The spokeswoman said the new trial was to help the company track products between its distribution centres and stores.
"This helps us ensure that products are in the right place at the right time for customers."
If RFID technology was attached to most products, checkout scanning would take seconds although Tesco has said in the past it had no plans to automate the payment process in this way.
The boycott is being called by the group Consumers Against Supermarket Privacy Invasion and Numbering (Caspian).
Caspian director Katherine Albrecht said the decision to carry out in-store RFID trials on products breached an informal moratorium that has, until now, limited the technology mainly to the production and supply-chain areas of big business.
"More people across Great Britain will be taking home items containing spy chips, and that is simply unacceptable."
She added: "If people must shop at Tesco, we are asking them to reduce their purchases."