Brand betrayal and moral judgment: consumers’ responses to M&A of local foodservice brands

Abstract

Purpose Mergers and acquisitions (M&As) are typical corporate strategies that provide hospitality business competitiveness. However, some recent evidence shows that when the merged and acquired (M&Aed) restaurants have strong local characteristics, consumers feel betrayed and perceive the M&As, legitimate business activities, as immoral actions. Building upon expectancy violation theory and moral foundation theory, this study aims to examine the moderating role of locavorism on the indirect effects of preexisting relationship quality on desire for avoidance and psychological loss through brand betrayal and moral judgment. Design/methodology/approach This study used the M&A of Whataburger chain restaurant as the scenario and recruited 399 Texas Whataburger consumers. A moderated mediation model was developed to examine the mechanisms through which preexisting relationship quality on negative responses to M&A of local restaurants. Findings The results showed preexisting relationship quality influences desire for avoidance and psychological loss negatively through brand betrayal and moral judgment. The indirect effects of relationship quality on the desire for avoidance and psychological loss become more accentuated among locavores. Practical implications The results implied that merging and acquiring (M&Aing) companies should closely monitor consumer dialogues to promptly respond to post-M&A uncertainties when M&Aed company has a strong local identity. Originality/value The unique contribution of this study is showing why consumers have extreme negative emotions and judgment of immorality when M&A decisions are made for local hospitality brands through the lens of brand betrayal and moral foundation theory. The results can help M&Aing companies mitigate consumers’ negative responses to M&A of local restaurants.