Despite repeated leadership changes, Starbucks continues to grapple with persistent shortages across its US stores, exposing deep-rooted supply chain issues that have resisted multiple turnaround attempts.
Over the past five years, four Starbucks chief executives have cited stock shortages — from milk and pastries to cup lids — as a key factor behind declining sales. Current CEO Brian Niccol has made fixing the supply chain a central pillar of his revival strategy. However, interviews with current and former employees suggest the problems run far deeper than publicly acknowledged.
According to former employees familiar with internal logistics, fewer than one-third of delivery trucks reached Starbucks distribution centres on time and fully stocked in early 2024 — far below the 95% reliability benchmark considered healthy by supply chain experts. Issues reportedly persisted into late 2025.
Employees blamed fragmented supplier coordination, outdated technology and poor demand forecasting, resulting in empty shelves in stores and overstocked warehouses elsewhere. Starbucks still relies on legacy IBM AS/400 systems introduced in the 1990s for core inventory operations, making modernisation complex and risky.
Starbucks has rolled out AI-powered inventory tools to automate stock counting in stores, developed by tech firm NomadGo. However, baristas and managers said the system frequently miscounts or mislabels items, undermining its effectiveness. Critics have described the initiative as a “band-aid” rather than a structural fix.
Earlier efforts under former CEO Laxman Narasimhan, including automated ordering systems, were rolled back after causing under-ordering and shortages.
Starbucks’ café design adds to the challenge. With limited backroom storage and highly perishable products, stores have little margin for forecasting errors. Food’s share of Starbucks’ revenue has grown from 15% in 2005 to 23% in 2025, stretching a supply chain originally built for beverages.
At times, overcorrections have led to excess waste. In September, stores reportedly discarded or donated large quantities of unsold food following a surge in shipments.
Starbucks says it is modernising systems, improving forecasting and giving store managers more control over ordering. While its share price has risen modestly since Niccol took charge, analysts say a fundamental overhaul will be required to restore reliability and customer trust.
