Starbucks has scrapped an AI-powered inventory system used across its North American stores after months of reported inaccuracies, including confusion between oat milk and dairy products, according to internal communications seen by Reuters. The move marks an abrupt reversal for a high-profile technology push that had promised slicker stock control but instead exposed the risks of relying on automation for everyday store operations.
The decision ends a nine-month rollout of the tool, which had been introduced as part of chief executive Brian Niccol's effort to address persistent stock shortages that have weighed on sales. Its withdrawal highlights the challenges the company faces as it leans on automation to improve store performance and supply chain reliability.
The system, developed to streamline stock checks, used tablets equipped with cameras and LiDAR sensors to scan shelves and automatically tally items such as syrups and milk. Staff were expected to benefit from faster and more accurate counts compared with manual processes.
However, the tool struggled in practice.Reutersreported in February that it frequently miscounted items or mislabeled products, particularly similar-looking goods such as different types of milk. In some cases, items were missed entirely.
Starbucks said on Thursday that the decision to discontinue the programme was part of a broader effort to 'standardise how inventory is counted across coffeehouses as we continue to focus on consistency and execution at scale'. The company added that it is working towards more frequent daily replenishments and ongoing supply chain improvements.
'Our goal is simple – if it's on the menu, customers should be able to order it,' the company said in a statement.
Internal feedback shared by Starbucks suggested some employees welcomed the change. One message cited by the company read: 'Thanks for discontinuing Automatic Counting! The thought behind it was great, but the execution was proving difficult.'
The AI inventory tool had been rolled out rapidly in September across North America, replacing manual counts for selected product categories. At the time, Starbucks said the technology would support 'smarter supply chain optimisation'.
A promotional video released during the launch showed the system failing to recognise a bottle of peppermint syrup while counting adjacent items, underscoring early reliability concerns.
The programme itself had been in development for several years before Niccol, who took over in late 2024, expanded its deployment nationwide. His tenure has focused heavily on operational improvements under aturnaround strategyknown as 'Back to Starbucks'.
Source: International Business Times UK
