Supermarket chain IGA has vowed to take on big guns like Coles and Woolworths with a new price-matching campaign, and has already moved to drop prices on more than 2000 products.

IGA, which has 800 stores nationally and a reputation for charging higher prices than its competitors, has stated that they will match the lowest price offered by either of the big two supermarkets in what is being labelled the retailer’s biggest ever competitive attack.

“We can fight Coles and Woolworths but we need to be getting on a level-playing field,” SUPA IGA store owner Tony Ingpe told The Advertiser.

“Everyone is time poor and they want to shop close and they want to get value so this is delivering value.

“This is the revamp we need, we are fighting the fight with the big supermarket and we want customers to know they can come here and do their full shop.”

The price match initiative will see prices cut on everyday items like cereal, coffee and pasta, but will exclude fresh produce. It will also exclude weekly or temporary special offers.

The retailer has already dropped prices on more than 2000 products. For example, a tub of Streets ice cream, previously sold by IGA for $6.96, has now been slashed to $4.90, the same price charged by Coles.

According to Choice, the bulk of our hard-earned cash, after housing expenses, goes towards groceries – more than $200 a week according to the most recent Household Expenditure Survey from the Australian Bureau of Statistics (ABS) in 2009–10, and food prices have most certainly increased since then.

“Our recent supermarket basket survey found IGA was eight per cent more expensive than Coles and Woolies, so this is very welcome news for consumers who are struggling to make ends meet,’’ Choice spokesman Tom Godfrey told The Advertiser.

So, where is the cheapest place to shop at the moment? According to Choice, it seems that Coles’ “down down” and Woolworths’ “cheap cheap” everyday low pricing strategies are no match for Aldi’s lower cost bases for labour, rent and other general and administrative costs, as Aldi retains its crown as cheapest supermarket.

Their basket of leading brand products cost $87.29 more at Coles ($174.97 excluding specials) and $89.09 more at Woolworths ($176.77) than a basket of equivalent products from Aldi ($87.68). So by foregoing leading brands you can save about 50 per cent off your grocery bill by shopping at Aldi.

The difference between Coles and Woolworths was less distinct – just $1.80 between them excluding specials for the leading brand basket – reflecting the intensive process of price monitoring that exists between the duopoly.

Independent chain IGA returned the most expensive basket – 8 per cent more expensive than the same basket of leading brand products at Coles (excluding specials).

Aldi may not be the cheapest supermarket for long, however, as discount German grocery store Lidl is reportedly in discussions to enter the Australian market.

Where do you find the best deals on groceries? Let us know in the comments below!