In this paper we discuss the rationale for the development of MyGrocer, a second-generation pervasive retail system, as well as its implications for the fast moving consumer goods (FMCG) sector. We will only touch upon the technology infrastructure and the required technical developments since these have been discussed extensively elsewhere. The focus here is on the one hand, on the analysis of the business forces that dictate the development of pervasive retail and on the other, the implications and the opportunities for innovative business models offered by the dis-intermediation effect of pervasive retail on the supply chain of FMCG. The MyGrocer system has undergone two phases of field-testing and is expected to be fully operational by the end of this year. The development of the MyGrocer architecture is a collaborative effort between industry and academia within Europe.

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