Starbucks has struggled for years to keep its thousands of US stores reliably stocked with essentials like milk, pastries, and cup lids.
Four CEOs over five years have cited these shortages as a factor behind lost sales, and current CEO Brian Niccol has made fixing the problem central to his turnaround efforts.
However, shortages are deeper than publicly reported.
Reuters interviews with current and former corporate employees reveal that outdated technology and a splintered supplier network continue to hamper Niccol’s efforts.
In early 2024, less than a third of deliveries to Starbucks’ distribution centres arrived on time with the full amount of products, employees said.
Inaccurate demand forecasting has led to empty shelves in stores and overstuffed warehouses, creating waste and customer frustration.
Niccol has taken multiple steps, including giving store managers more autonomy for ordering supplies, tweaking the Starbucks mobile app to show shortages, and hiring logistics executives, including Chief Technology Officer Anand Varadarajan, formerly of Amazon’s grocery operations.
The company also rolled out an AI-powered “automated counting” tool in September to improve inventory visibility.
Cafe workers scan shelves with tablets using LIDAR and camera data, but the app frequently miscounts or mislabels items. NomadGo, the app’s provider, claims 99% accuracy, while Starbucks said adoption has improved product availability without specifying by how much.
Predecessor CEOs also attempted fixes. Kevin Johnson and Laxman Narasimhan implemented automation in ordering and store inventory management, but programs like “Never-Out” and “automated ordering” were scaled back, and problems persisted.
Supply chain issues stem from Starbucks’ scattered supplier base, including small regional vendors unable to scale quickly, and 1,500 different cup-and-lid pairings that complicate automation.
Outdated IBM AS/400 systems also slow inventory processing. Starbucks says it is modernising these systems.
The company’s business model adds pressure: US stores have minimal storage, and food and milk are perishable.
Food’s share of revenue grew from 15% in 2005 to 23% in 2025, surprising the supply chain. Overstocked items often go to waste or donation, and employees report significant amounts of food discarded during promotions.
