COLES and Woolworths already have Aldi biting at their heels, and now another challenger is has thrown down the gauntlet in the supermarket price war.

Metcash owned grocery chain IGA will try to hit the duopoly where it hurts with a new price-matching campaign, and has already moved to drop prices on more than 2000 products, The Adelaide Advertiser reports.

IGA, dubbed the “silent loser of the supermarket wars” for years, has vowed to match the lowest price offered by either of the big two supermarkets in what is being labelled the retailer’s biggest ever competitive attack.

IGA has 1400 stores nationally with 800 of them participating in the campaign.

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

“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.”

Examples of the deep discounts include a tub of Streets ice cream, previously sold by IGA for $6.96, now slashed to $4.90, the same price charged by Coles.

IGA has suffered for its reputation for higher prices in recent years.

But the new change of tack has been labelled “great news” by consumer group Choice.

“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.

The move comes just days after a bruised Woolworths announced 1200 job cuts and the departure of its CEO Grant O’Brien, widely regarded as having led the retailer in the wrong direction.

Woolworths, which is on a $500 million cost-cutting drive, is expected to post a $2.15 billion full-year profit, down from $2.45 billion last year.

In contrast, Coles has seen sales lift 3.8 per cent in its most recent quarter.

Aldi, which has taken 11 per cent market share from the big two supermarkets, is also reportedly planning to take advantage of a wounded Woolies by speeding up its $750 million expansion plans in South Australia and Western Australia.

The Australian reports the German cut-price chain will open 20 stores in each state next year, giving residents their first taste of the Aldi discount model.

Aldi already has 350 stores Australia wide and may be on course for a price war of its own with the announcement that fellow German discount retailer Lidl intends to launch in Australia.

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