Inglewood setback viewed as dot on Wal-Mart's big picture.

In the end, the world's biggest retailer may only have stubbed its toe.

Despite a stinging repudiation by Inglewood residents, last week's vote against Wal-Mart Stores Inc. was largely shrugged off by Wall Street.

To be sure, the Bentonville, Ark.-based retail giant will face serious challenges penetrating the nation's most populous state with its goal of 40 supercenters and their super-sized grocery sections over the next five years. But they represent only a fraction of the retail giant's planned growth elsewhere, where opposition is scattered and not expected to be as strong.

"It's definitely a defeat and a setback, and I think it will slow them down, at least initially," said Joe Bonner, an analyst with Argus Research, an independent securities analysis firm. "(But) nationally and internationally I don't think it will affect them very much."

Last week, Inglewood residents voted by a nearly 2-1 margin against Wal-Mart's plan to build the 200,000-square-foot store. The company spent more than $1 million in its losing campaign.

The initiative was opposed by local elected officials, clergy, civic groups and especially labor, which funded the resistance fearing the non-union stores will put unionized supermarkets with their higher pay and better benefits out of business.

It is believed to be the first time local voters turned down a supercenter anywhere, although traditional Wal-Mart's that do not sell groceries have been rejected at the ballot box before. The day after the vote, Wal-Mart stock tumbled just over a dollar, to $57.98 a share, although analysts blamed part of the drop on a market-wide stock sell-off.

Mitigating factors

Union leaders and other Wal-Mart opponents hailed the victory, saying it will boost other efforts by California cities to keep the big-box stores out of their area.

The Los Angeles City Council is expected to vote in the coming months on an ordinance that would restrict the stores to a narrow swath of the San Fernando Valley, between Sun Valley and Northridge.

Oakland and Turlock have laws on the books prohibiting big box retailers, while San Diego is considering such a law. In Hemet and Bakersfield, residents have sued to stop the centers.

Bill Dreher, an equity analyst for Deutsche Bank, said opposition to Wal-Mart is especially strong in California, where there are two anti-Wal-Mart bills before the state Legislature.

One of the bills would require the retailer to reimburse local government for the cost of providing public health care to its supercenter workers (who receive limited benefits), while another would require lengthy economic impact reports that could be used to kill off the store proposals.

But Dreher said these were not huge headaches for the world's biggest retailer. "The plan for California is 40 stores over five years, versus more than 1,000 stores (planned) nationwide," Dreher said.

Much of the growth is planned for the South, where the company has faced scattered community resistance but has more often than not been successful at beating back ordinances designed to keep them out.

Still, Wal-Mart has a reputation of being persistent in its goals, and company officials maintained last week that they would push ahead with their efforts to build stores in the region and state.

The company has shown flexibility when it is unable to penetrate a specific city and often will choose a nearby location to open a store--a strategy suitable to the supercenters, which can bring in as much as $1 million a day in revenues.

"This is nothing new to Wal-Mart," said Ulysses Yannas, an analyst with Buckman Buckman & Reid. "Throughout their history they have faced opposition."

Madeline Janis-Aparicio, executive director of the Los Angeles Alliance for a New Economy, which helped lead the Inglewood opposition campaign, said she could imagine Wal-Mart seeking to open stores in outlying areas.

"I am just hoping that what we have done in Inglewood will inspire communities across the state to stand up and demand responsible development," she said.

But Bonner cautioned against reading too much into the Inglewood scuffle, because it arose from an unusual set of circumstances. Wal-Mart has often attempted to overturn laws set up to keep it out, but here the retail giant attempted to bypass existing processes.

"This was a unique situation. It was overreaching," said Bonner. "I don't expect them to make a pattern of this. They learn from their mistakes."