Starbucks scraps AI inventory tool after nine months as automation fails to deliver

Starbucks abandons its AI inventory tool after only nine months - Engadget

Looks like manual inventory management is back on the menu, boys. Sometimes, AI helps you fine-tune weather forecasts or improve the lives of people with disabilities. Other times, well, it loses a fight with a bottle of peppermint syrup. That's the situation Starbucks CEO Brian Niccol finds himself in after the coffee chain reportedly told staff that it's scrapping an AI inventory program after only nine months. Starbucks rolled out the "Automated Counting" software to its North American stores in September 2025. Developed in partnership with NomadGo, the AI-powered tool was supposed to speed up inventory tracking. Employees (likely fearing that they were holding their replacements) would use mobile devices to scan items on shelves. The idea was simple: Automate the tedious task of counting milks and syrups, increase accuracy, and optimize the supply chain. Welcome to the AI revolution, baby. A since-deleted September blog post by CTO Deb Hall Lefevre laid on the hype as thick as the whipped cream on a mocha Frappuccino: "With a quick scan using a handheld tablet, partners can instantly see what's in stock -- ensuring cold foam, oat milk, or caramel drizzle are always available," it read. "Customers can enjoy beverages their way, every time -- and partners spend less time in the backroom and more time crafting and connecting." ("Partners" is Starbucks' term for its employees.) Well, things didn't quite turn out that way. Reuters reports that the tool frequently mislabeled and miscounted items. It was known to mix up similar milk types or skip them altogether. The video above, embedded in Starbucks' September blog post, foreshadowed the tool's struggles. The clip inadvertently showed the system missing a bottle of peppermint syrup as a worker scanned the shelf. (Did Starbucks deploy a half-baked AI video editor, too?) So, Starbucks "partners" will now go back to the good ol' days of manually counting inventory. "Beverage components and milk will now be counted the same way you count other inventory categories in your coffeehouse," an internal company newsletter, viewed by Reuters, said. Apparently, workers won't miss it much. "Thanks for discontinuing Automatic Counting!" one employee reportedly wrote in response to the change. "The thought behind it was great, but the execution was proving difficult."

Starbucks scraps AI inventory tool across North America

NEW YORK, May 21 - Starbucks terminated a worker-facing AI program for automating inventory counts this week, nine months after deploying it across its North American stores, according to an internal newsletter reviewed by Reuters and two people with direct knowledge of the situation. The tool was part of CEO Brian Niccol's efforts to fix the coffee chain's persistent product shortages that he has blamed for hurting sales. "Starting today, Automated Counting will be retired," read an internal company newsletter from Monday that Reuters reviewed and verified with two employees. "Beverage components and milk will now be counted the same way you count other inventory categories in your coffeehouse." The automated counting app - designed to improve Starbucks' visibility into shortages at stores - frequently miscounted and mislabeled items, such as confusing similar milk types or missing them altogether, Reuters reported in February. A video uploaded by Starbucks showed the tool failing to recognize a peppermint syrup bottle on the shelf as it counted adjacent bottles. At the time, Starbucks told Reuters that adoption of the tool had improved product availability in stores - one of Niccol's primary store-level measures of progress in his corporate turnaround campaign. In a statement to Reuters on Thursday, Starbucks said the termination of the program - which covered milk and other beverage products - came from a decision to "standardize how inventory is counted across coffeehouses as we continue to focus on consistency and execution at scale." The coffee chain also said it is working towards more frequent, daily replenishments to stores and continued supply chain improvements. (Reporting by Waylon Cunningham, Edited by Lisa Jucca and David Gaffen)