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The supermarket crackdown and a surprise income tax cut are among a string of government proposals to ease the cost of living, which voters consistently cite as a top concern.
Surveys show the centre-left government and conservative opposition running neck-and-neck in the election race.
"Australians deserve a fair go at the checkout. We will hold the big supermarket chains to account," Albanese told reporters, promising to introduce legislation this year.
"Price gouging is when supermarkets are taking the piss," he said.
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Asked how abuses would be addressed, he promised "heavy fines to make sure that they know that if they're ripping people off, then they're in the gun to pay a heavy penalty."
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The government would set up a task force with representatives from the Treasury, competition regulators and consumer groups to decide on action, Albanese said.
Australia was looking at overseas examples of regulating unfair pricing, he said, including in Britain and the European Union.
Australia has one of the most concentrated grocery sectors in the world, with big players Coles and Woolworths enjoying considerable power to set prices for consumers and suppliers.
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Competition regulators said in a report this month that the two companies enjoyed growing profit margins and had "limited incentive to compete vigorously with each other on price".
James Paterson, senior member of the main opposition Liberal Party, said the prime minister had failed to define price gouging.
"We are very happy to make price gouging illegal," the senator said in an interview with public broadcaster ABC.
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But the opposition also planned to introduce targeted divestment powers, which could be used as a "last resort" if supermarkets abused their market power, he said.
Opposition leader Peter Dutton has proposed cost-of-living measures including a one-year cut to gasoline tax, and a scheme to rein in gas prices by obliging producers to keep a share of output for the domestic market.
Annual consumer price inflation was 2.4 percent in the final quarter of 2024, after peaking at 7.8 percent in 2022.
A YouGov survey released Sunday put support for the ruling Labor Party and conservative opposition coalition level, with Labor at 50.2 percent and the coalition at 49.8 percent on a two-party preferred basis.
That would translate into a hung parliament with Labor one seat short of a majority, it said, putting the government in a "strong" position to remain in power.
