Australian law firm Gerard Malouf & Partners on Thursday said it had filed class action lawsuits against the country's top two retailers, Woolworths and Coles , for allegedly encouraging misleading discount claims on everyday products.

Coles and Woolworths have been slugged with a new class action following allegations by the competition regulator that the supermarkets made false promises to offer best prices for cash-strapped shoppers.

A consumer protection law firm has launched a class action against Coles and Woolworths, saying their allegedly misleading discount claims mean the average customer could be entitled to a refund of up to $1300.

Australian grocers Woolworths and Coles said on Friday they would defend class action proceedings commenced by a law firm in federal court over alleged misleading discount claims. The comments sent shares of Woolworths up as much as 1.