The move will increase the pressure on Britain's already beleaguered high street, with analysts predicting a wave of copycat price cuts as rivals slug it out for seasonal trade.
Storehouse would not confirm plans for an all-out price campaign but admitted its level of discounting would increase in the coming weeks.
"We will obviously have a promotional programme to maintain our share of the market," a Storehouse spokesman said.
"We have already done knitwear and coats and you will see progressively more in the run-up to Christmas. It is very promotional out there and we need to be competitive."
There has been speculation that a major UK retailer was about to "break ranks" with a major pre-Christmas sale.
That the culprit is Storehouse's Bhs chain is no real surprise after the company announced plans last week to separate its Bhs and Mothercare operations and re-position Bhs as a lower-priced operation.
The Bhs move will deepen the gloom among retail investors which have seen share prices ravaged by a series of downbeat announcements, including a profits warning last week from Arcadia, the former Burton group.
Several major retailers are already running significant promotions. C&A is running a "mid-season sale" with many items with a third off or even half price. Marks & Spencer has just finished a promotion offering 20 per cent of women's night attire.
"It's a blood bath out there," said one retailer yesterday. "People are just delaying purchases thinking they will pick them up cheaper in a couple of weeks time."
Littlewoods, the privately owned retail group, is thought to be finding the going tough as well at the moment, though its like-for-like sales are understood to be only a couple of per cent down on last year.
Some retailers are even predicting that an increasing number of consumers will buy gift vouchers as Christmas presents this year, so the recipients can pick up their gifts at cut-price in the January sales.
Littlewoods venture, page 21