NEW YORK, May 21 - Starbucks has stopped using an automated, worker-facing artificial intelligence application that had been deployed to count inventory across its North American stores, according to an internal company newsletter reviewed by Reuters and two people with direct knowledge of the situation. The tool, introduced as part of efforts by CEO Brian Niccol to reduce persistent product shortages, was removed this week.
The internal newsletter stated plainly: "Starting today, Automated Counting will be retired." It added that "Beverage components and milk will now be counted the same way you count other inventory categories in your coffeehouse."
The automated counting app had been intended to give the chain better visibility into stock levels and reduce out-of-stock incidents. However, it frequently miscounted and mislabeled items, including confusing similar milk types or failing to detect them at all, Reuters reported in February. A company-uploaded video also illustrated a failure: the tool did not recognize a peppermint syrup bottle on a shelf while counting adjacent bottles.
When the program was earlier discussed publicly, Starbucks said the tool's adoption had helped improve product availability in stores - a key performance indicator in Niccol's plan to address store-level issues cited as weighing on sales. Despite that assertion, the company decided to discontinue the particular automated counting app for milk and other beverage products.
In a statement provided to Reuters on Thursday, Starbucks said the decision to end the program stemmed from a desire to "standardize how inventory is counted across coffeehouses as we continue to focus on consistency and execution at scale." The company also said it is working toward more frequent, daily replenishments to stores and continued supply chain improvements.
The move affects an employee-facing operational tool that had been in place for nine months and reflects a shift back to manual or standardized counting procedures for certain beverage inventory categories. Starbucks characterized the change as part of broader efforts to improve consistency and store execution rather than an abandonment of technology initiatives altogether.
Context and operational detail
- The automated counting app covered milk and other beverage components and was deployed across North American stores.
- Management framed the tool as a remedy for product shortages, which company leadership had linked to weaker sales performance.
- Following termination of the app, Starbucks plans to standardize counting methods and increase replenishment frequency.
Market snapshot
The article included a near-real-time market reference for the Starbucks ticker: SBUX displayed at 104.31, down 2.19 points or 2.06% at the time of the snapshot.