Food & Grocery Council chief executive Katherine Rich said consumers, suppliers and other retailers would welcome the Government's plans.
"This will make a difference," she told the Herald.
The council particularly welcomed the strong emphasis on a mandatory code of conduct - a council goal since 2010.
"It's a major task unravelling the harm caused by New Zealand's duopoly market structure, but the announcements make the direction clear," said Rich.
"The Government has recognised change needs to occur if there is to be genuine competition in the grocery market and an improvement in retailer behaviour.
"New Zealand is the only country in the world whose market has distilled down to a duopoly, and the suite of changes announced today will make a difference by nurturing new buds of competition.
"Independent retailers will never be competitive as long as they have to line up at the supermarket with everyone else. As we have said regularly, the wholesale market for groceries is broken, and competitive access to a full range of products is important to support healthy competition.
Rich said minister Clark deserved high praise.
"We suspect many might not appreciate the full picture of his work to change the grocery industry's entire commercial framework.
"And he has made it clear today there is more to do.
"In his Dunedin no-fuss way he has strengthened the Commerce Act to allow market studies, overseen a market study, strengthened Section 36 of the Commerce Act regarding the use of market power, changed the Fair Trading Act to prohibit unconscionable conduct and unfair trade practices for small businesses, and he will introduce a mandatory Code of Conduct to make supplier/retail relationships more transparent.
"The changes he has quietly championed in the commerce portfolio will make a difference to the competitiveness of New Zealand's grocery market."
Revealing the Government's response to the commission's market study into supermarkets, published in March, Clark said it was acting on a lack of competition in the sector and warned it to change "at pace" or face regulation.
The commission estimated Countdown and Foodstuffs were making excess profits of about $430 million a year - more than $1 million a day.
Clark said the Government accepted 12 of the commission's recommendations but rejected two, in favour of stronger measures.
It rejected a recommendation that he duopoly be left to consider requests for wholesale supply from other retailers in good faith - instead opting to progress a mandatory wholesale access regime.
The Government also rejected the commission's recommendation to wait three years before reviewing the state of competition in the grocery sector following implementation of any changes.
The state of competition will instead be reviewed annually by a grocery sector regulator.
Duffy said it was "beyond debate" that competition was not working well for consumers in the supermarket sector.
"The Government's response demonstrates a commitment to fixing the underlying issues that are producing lacklustre competition and high profits, and contributing to high prices at the checkout."
Without this commitment, Kiwis would have had to put up with the status quo for at least the next three years, Duffy said.
"We need to create an even playing field for new and emerging grocery retailers," Duffy said.
"The voluntary regime recommended by the commission would have left competitors at the mercy of the very companies they'd be competing with. Putting a regulatory regime in place will ensure that new and emerging retailers must be treated fairly."
The Government has also committed to further analysis to promote effective competition.
This could include retail divestment, which could involve supermarkets being forced to sell stores to make way for competitors.
ACT leader David Seymour criticised the Government's move.
"Labour seems to think that more regulation will fix our supermarket industry, but that's exactly what the problem is.
"An industry regulator, more codes of conduct, compulsory pricing, only Labour could possibly think those measures would increase competition in the supermarket industry."
"Chucking even more regulations on the sector is going to do the complete opposite, it will disincentivise ambitious people from entering the industry and creating more competition.
Seymour said if it was too hard to build a house in New Zealand, "imagine a supermarket".
"It's too hard to build, too hard to invest, too hard to do business in New Zealand."
The right to food must be the core driver of Government action to reign in unfair behaviour by supermarkets, said the Green Party.
"Food is a basic human right and for too long the supermarket duopoly has made huge profits at people's expense, while also not giving food growers and makers a fair deal," said Green Party commerce and consumer affairs spokesperson Ricardo Menéndez March.
"The Green Party welcomes the creation of a supermarket industry regulator 'watchdog' and mandatory code of conduct, which we have been proposing for more than a decade.
"Opening up supermarkets' wholesale arms to competitors, and potential separation of their wholesale and retail arms, could be a game changer. We've seen it drive better competition in sectors like telecommunications and it has real potential to bring food prices down for people in Aotearoa.
