Sainsbury's is set to invest £550million in a bid to take on Aldi and keep its prices low over the next two years.
The supermarket is battling against losing trade as customers look for ways to cut costs amid rising prices.
This Christmas will be another difficult one for many Brits in the cost of living crisis.
Bird flu has pushed up the price of fresh turkeys while food and soft drink inflation was running at a record breaking 16.4 per cent last month.
This compares to the general rate of 10.7 per cent.
Sainsbury’s CEO Simon Roberts announced the supermarket's £550m investment in a message of hope for shoppers feeling the pinch.
It is part of the retail giant's strategy to "take on Aldi" and become more competitive.
“It is really tough. Customers are watching every penny, every pound,” Mr Roberts told the Mail on Sunday.
"On a lot of products that people buy every week, we are price matching to Aldi so they are getting Sainsbury's quality and an Aldi price."
The retail boss is prepared to accept a fall in profits in the short term in order to ensure Sainsbury's stays competitive for shoppers.
From the £550m investment, more than £15 million will go towards fighting rising costs and keeping prices low over the festive period.
Christmas roast dinners are priced at just under £4 per person to serve six people.
The meal includes turkey, pigs in blankets, potatoes, carrots, parsnips, cranberry sauce, Yorkshire puddings and Brussels sprouts with a sherry trifle for dessert.
Price matching to Aldi has been a key part of Sainsbury's focus and has been rolled out across hundreds of everyday items and customer favourites since its launch earlier this year.
Aldi took £170m of sales from the former Big 4 this summer, before finally overtaking Morrisons to become the UK's fourth biggest supermarket.
Mr Roberts said there is "zero room for complacency" but insisted that while the cost of living remains top of the agenda for now, shoppers care about more than just prices.
"We are seeing more customers coming back to us from the discounters," he said, highlighting the limited range offered by discounters cannot match that of a typical Sainsbury’s store with more than 30,000 food products.
"Do you want to go to lots of places for what you need or one place? Time is precious, not just money," he added.
