Under the stewardship of Richard Goyder, Wesfarmers has staged a textbook turnaround in most of its retail business over the past five years, but the conglomerate's engine room, Coles, is reaching a point where the serious improvements are a thing of the past.
Coles boss Ian McLeod calls it the second wave of transformation. The low hanging fruit has been harvested and getting returns above broader economic growth is going to be more difficult.
Goyder says Coles is still taking market share, thanks to improving its product offer but mainly due to reducing prices. But there is a limit.
Wesfarmers acquired the bulk of its retail businesses when they were in intensive care mode and invested well in specialist management to undertake a financial recovery.
The headline food and liquor sales growth for the first quarter of 2014 were a respectable 4.4 per cent and comparable store sales were 3.4 per cent, but they were less than the market was expecting.
The liquor side of the business (as usual) was a drain on the sales improvement and price deflation of 2.5 per cent presented some headwinds.
The scaling back of fuel discount offers, which at their height were a source of market share gains, has also had a negative effect on sales growth. In fresh foods, prices for items such as bananas and tomatoes fell up to 30 per cent. (A good time for smoothies and spaghetti).
Goyder has just passed the five-year mark on the purchase of the Coles retail group - which includes Kmart and Officeworks - and the results are laudable overall. The performance of Target is another issue and I will get to that later.
There is more to be milked out of Coles supermarkets but management is not making any wild claims about the rate of future improvements. Bringing the liquor division up to performance is one potential source of gains but even after five years getting traction in this area remains elusive.
Wesfarmers' next lift may come from a positive shift in consumer sentiment, something that has been absent since it acquired Coles.
Goyder isn't making particularly optimistic projections in this regard. While the Coles supermarkets would be a beneficiary if consumers opened their wallets, the strategy of feeding off consumers that are value conscious has worked in its favour.
The discretionary brands within Wesfarmers such as Kmart and Target have fared differently during the period of consumer austerity.
Kmart has done relatively well by marketing itself as a good value discount department store, outperforming its major rival, Big W.
The bright star in the Wesfarmers line-up is Bunnings. Its improvement is a credit to boss John Gillam but a weeping sore for Woolworths that set up its home improvement brand, Masters, to steal market share and momentum. . It has failed to undermine Bunnings, which boasted same-store growth over the quarter of more than 7 per cent.
While Officeworks chugs along, the problem child of the Wesfarmers family continues to be Target.
Yet another poor performance from this division is not all that financially material for Wesfarmers but is a blot on its score card. Goyder has consistently said it has a right to its place among the group's line-up. But its continued underperformance cannot be sanctioned forever.
New management has been put in place and getting rid of excess inventory remains the feature of another disappointing sales performance. But it is now time for the line to be drawn.
Investors are entitled to expect the current quarter sales and profits will reflect the new Target. If not, they will be justified in asking whether this brand should be sold.
Target is a brand pitched between premium and discount department stores without a market anchor.
It is the brand that will respond well to an improvement in consumer sentiment when bargain hunters start to open their wallets.
Goyder is of the view that the settings are right for a resurgence in consumer spending and is cautiously optimistic that Christmas will be better.
Certainly the improvement in property prices and the stockmarket will enhance the wealth effect that entices spending.
But he said the post-election spending buzz lasted only a week and that patterns had now moved back to where they were before the pre-election freeze.