Amazon is shrinking private brands like AmazonBasics, report says, even as inflation steers consumers toward less-expensive products

• Since 2009, Amazon has built products such as its AmazonBasics line into a private-label behemoth.
• Reporting from the Wall Street Journal indicates that Amazon's private-label days may be numbered.

Amazon is reportedly cutting back on its private-label business — including its colossal AmazonBasics brand— by winnowing the number of items and categories. According to an exclusive article from the Wall Street Journal, the online retail giant is also considering nixing its private-label selections altogether.

Amazon has pushed back against the Wall Street Journal's findings.

"We never seriously considered closing our private label business and we continue to invest in this area, just as our many retail competitors have done for decades and continue to do today," an Amazon spokesperson told Insider in a statement.

Amazon's reported strategic pivot comes at a time where private-label brands are thriving at other major companies, like Walmart and Target. With inflation soaring, shoppers are flocking to cheaper "owned" brands to save money. But after years of rapid expansion, Amazon is reportedly finding that some of its private-label options are dwindling in sales. Plus, private-label brands have been a knotty legal headache for the company.

Amazon has historically stressed that private-label only accounts for 1% of the company's retail sales. Still, the company has built a private-label business boasting 243,000 products since founding the line in 2009, the Journal reported.

Meanwhile, in addition to AmazonBasics, the company owns dozens of other private-label options, including Solimo and Goodthreads. According to a report from MarketPlace Pulse, the trouble with Amazon's private-label sales may have been on the horizon for some time. The e-commerce intelligence firm found that "Amazon-owned private label brands are not nearly as successful as many paint them to be" and that the company's ability to create "generic items at low prices" more often than not fizzled with shoppers.

In addition, Amazon's private-label success has attracted scrutiny from lawmakers in the past. The company has been accused of using third-party sales data to craft cheaper, "copycat" products to thwart the competition. According to the Wall Street Journal, the prospect of possible regulatory pressure is a major factor influencing Amazon's new interest in possibly reducing its private-label footprint.