Firstly you need to install a plugin called regenerate thumbnails and activate it.
Then go to Woocommerce > Settings > Catalog, scroll to the bottom of the page you will see image options.
You need to increase the size of the default dimensions of the images.
To do this just change the figures for Product/Catalog to 300x300 for example. Try different settings until you're happy with the images.
Every time you change these settings you must go to the Media tab and regenerate all of your thumbnails. This should cure the blurred pics.
Jonwilld