A new AI 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.

• For more financial news, visit News24 Business.

Starbucks terminated a worker-facing AI programme 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 mislabelled 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 programme - which covered milk and other beverage products - came from a decision to "standardise 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.

Discover the Truth

Step into a world where the truth shines bright, and every headline is worth your time. With News24, you're not just reading the news; you are part of a community that values knowledge and insight. Immerse yourself in compelling stories, sharp analyses, and content that keeps you ahead of the curve.