Who spoils the barrel? Negative spillover effect on competitor brands during food crises

Abstract

Despite an increase in food crisis incidents and their negative influence, little attention has been paid to spillover effects from food crises on competitor brands. Thus, this study examined reciprocal spillover effects (horizontal and vertical) from food crises on competitors' brands depending on the directionality of spillover and association strength. In order to test the reciprocal spillover effects on competitor brands, this study employed an experimental design using restaurant brands’ food crises. The results indicated that a stronger negative spillover was found among high equity brands (High to High compared to Low to Low) and when association strength was high rather than low. Interestingly, the results also showed a spillover effect from low equity brands to high equity brands (Low to High compared to High to Low), supporting the power of a small apple to spoil the whole barrel. These results enhanced the field’s understanding of spillover effects in the restaurant industry and suggested the need for pre-crisis communication strategies.