The announcement comes after the Woolworths' chief executive, Michael Luscombe, said on Wednesday that retailers would need to cut prices and advertise heavily, or face sluggish sales figures.

In a commercial that first aired on Thursday evening, Woolworths said that 3500 grocery products had been discounted over the past three months, adding: ''That's just for starters.''

The ad has been interpreted as a response to Coles' announcement on Tuesday that it would bring in standardised pricing for 8000 of its grocery products across the nation, excluding fresh fruit and vegetables.

The competition expert, Frank Zumbo, from the University of NSW, questioned the timing of the campaign, and said more information was needed.

''It's great that there's been this outbreak of pricing announcements from Coles and Woolworths,'' he said. ''In relation to both there seems to be a lot of talk but what we need to see is the detail.''

Mr Zumbo said he thought Woolworths had been rattled by Coles' announcement, and was now playing ''catch-up''.

The Woolworths director of supermarkets, Greg Foran, said that the price reductions were a way to reward customers. ''The reason we can do this is because we've spent a decade driving costs out of our business and becoming as efficient as we can.''

The managing director of buying for Aldi, Tom Daunt, said that he welcomed any moves towards national pricing from competing supermarket chains.

''Once all the major supermarket chains have rolled out national pricing, Australian consumers will be better able to see how they can get the best value for money.''

Last year Coles and Woolworths were criticised for contributing to Australia having the fastest-growing grocery prices in the world. OECD data shows that between 2000 and 2009, food prices increased by 41.3 per cent.

Mr Zumbo said that the ''jury is out'' on whether shoppers will be better off with the new discounts, and called on the Federal Government to bring in legislation to ensure prices stay down.

''Promises are great but they need to be backed up by a legal guarantee,'' he said. ''We need the Government to step up and ensure consumers can rely on these claims made by Coles and Woolworths.''

On Wednesday Woolworths' share price lost 2.5 per cent, due to lower than expected sales.