The chain said that around 250 products will see prices reduced to match the equivalent items at the German discounters.
Sainbury’s said the move will focus on its most popular items with customers, including meat, chicken, fresh fruit and vegetables, and dairy.
Mark Given, chief marketing officer, said that the price reductions will be funded by a “significant investment” by Sainsbury’s.
“We recognise that giving customers good value is a core part of our strategy so will invest to keep prices low,” he said.
“When we’ve completed research, our shoppers have highlighted our quality and value for money, but with customers who also shop in other supermarkets we need to improve our price perception.”
It said price reductions will include reducing a kilo of plain flour from 80p to 45p, a kilo of baby potatoes from 95p to 65p and a 21-day matured rump steak from £2.50 to £2.32.
The price match is the first new initiative of chief executive Simon Roberts’ plan, announced in November, to put food back “at the heart of the business”.
The cuts, which will primarily involve own-brand products, come almost a year after Tesco launched its own Aldi price match scheme to keep its prices in competition with the fast-growing discounters.
Aldi has seen its rapid sales growth fall behind some of its rivals during the pandemic, as its smaller online proposition meant it has not been able to fully take advantage of the booming demand for home deliveries.