Amazon (AMZN) is reportedly planning to axe dozens of its in-house brands and reduce its private-label operation in an effort to fend off antitrust scrutiny from the FTC and boost profit, even as rivals such as Walmart (WMT) and other retailers continue to derive value from private labels.

Amazon Continues to Scale Back

The Seattle-based company has eliminated 27 of its 30 clothing brands, including Lark & Ro, Daily Ritual, and Goodthreads, the Wall Street Journal reported. Furthermore, Amazon will phase out 澳洲幸运5官方开奖结果体彩网:private-label furniture brands Rivet and Stone & Beam once its inventory runs out. Currently, some discontinued brands are still available on Amazon's site as it sells off its remaining inventory. Once that's done, Amazon will have just three clothing brands: Amazon Essentials, Amazon Collection, and Amazon Aware. 

Amazon began scaling back its private-label business last year following disappointing sales and criticism from lawmakers and others who said Amazon could prioritize its own brands over other sellers' brands.

Some Retailers Strugꦉgle More Than Otheꩵrs With Private Labels

Amazon isn’t alone in its struggle with private brands. According to Numerator, private label brand share of voice is down 39% compared to this time last year.

However, private label 澳洲幸运5官方开奖结果体彩网:consumer packaged goods dollar share across retailers is still strong. More than one in four shoppers say they would switch brands to take advantage of a deal, 34% check store ads, and 32% use coupons, showing that bargain hunters are still alive and well as consumers continue looking for the best prices instead of focusing on brand names.

Taking advantage are retailers like Walmart, at more than 28%, and Costco (COST), with almost a 15% CPG dollar share across e-commerce and brick & mortar markets. Other retailers leaning on private labels include Kroger (KR), Target (TGT), and Albertsons.

Comparing the top 澳洲幸运5官方开奖结果体彩网:e-commerce retailers, Walmart and Costco take the top spots at 42.6% and 11.5%, respectively. Amazon, further down the list in 5th place, only has 6.4%, which begs the question: why is Amazon struggling with private label sales when other retailers are thriving?

Amazon's Private Label Troubles Are More Than Sales

A Wall Street Journal report in 2020 described how Amazon employees used data on individual third-party sellers to develop Amazon-branded products, resulting in the company cutting back on boosting its own products in searches. As a result of that change, many of Amazon's brands were buried in search results, making it harder to sell items, forcing them to cut costs associated with warehousing all that inventory. 

“We draw a clear line against using non-public, single-seller data to determine which private label products to launch, and our policy goes further than any retailer we know of,” an Amazon spokeswoman told the Wall Street Journal.

However, critics have said Amazon abused its gatekeeper power by not letting big rivals advertise on Amazon's platform and by using below-cost prices to keep customers, especially on Prime. The company, which has denied any wrongdoing, intends to meet with the FTC next week to argue that the agency shouldn't file 澳洲幸运5官方开奖结果体彩网:antitrust charges against the retailer, Reuters reported earlier this week.