WSU Cougar Head Logo Washington State University
WSU Insider
News and Information for Faculty, Staff, and the WSU Community

Food safety crises at smaller restaurant chains can hurt giants

A raw-looking burger with a bite taken out of it.
Photo by Bob Hubner, WSU Photo Services.

EVERETT, Wash. –  When it comes to a food safety crisis like an E.coli outbreak, little restaurant brands have an outsized influence.  

A recent study published in the International Journal of Hospitality Management found that a theoretical crisis at one restaurant made people hesitant to eat at other restaurants even though they were not directly involved in the event.

The negative spillover effect was also greater from the bottom up than the top down, meaning a crisis at a small restaurant chain hurt the big-name brands more.

“This finding shows the power of small apples to spoil the whole barrel,” said Soobin Seo, an assistant professor at Washington State University’s Carson College of Business and lead author on the study. “This is a warning sign. It is not good news for restaurants overall when somebody else is in crisis.”

A woman with long dark hair leaning against a tree
Soobin Seo

The findings underscore the need for restaurants to be prepared to respond to a crisis, Seo added, whether it is their own or a competitor’s. The restaurant industry is particularly vulnerable to spillover from crises, the authors note, partly because of the perception that restaurants get their ingredients from the same places.

“When people hear about bad news about one automobile company, they can easily buy from another,” Seo said. “But in the restaurant industry, even though the other brands did nothing wrong, customers feel hesitant after an outbreak, and it doesn’t hurt them if they do not go to out to eat for a few days. Crises are psychologically much more influential when it comes to restaurants, and that is why there are more financial impacts.”

For the study, Seo and co-author SooCheong Jang from Purdue University presented 380 participants with different crisis scenarios. They first read a theoretical news story about an outbreak of a food-borne illness that occurred at either a “high-equity” fast food brand such as McDonald’s or Wendy’s, or a smaller “low-equity” brand such as Carl’s Jr. or Hardee’s. The study used brand names of real restaurants so they would be easily recognizable, but the outbreaks were fictional. The participants were then asked their intention to visit other restaurants that were not involved in the incident.

The researchers found that knowledge of an outbreak at a high-equity, fast food restaurant caused people to be reluctant to go to its direct competitor, so an outbreak at McDonald’s, for example, would cause people to hesitate to visit Wendy’s. However, it did not have much effect on the less well-known restaurants like Carl’s Jr. and Hardee’s.

Yet, in the scenarios where a low-equity brand had the outbreak, reaction spilled over to its low- and high-equity competitors. The low-equity brand crisis even impacted those outside their fast food establishment style, such as the casual dining restaurant Outback Steakhouse.

Given the extent of the spillover, Seo advised restaurants to plan their response well ahead of any incident. “No matter what level of crisis, your responsibility or credibility, it’s always better to act immediately and honestly with the public: to have a proactive strategy to assure the safety of food,” she said.

Media Contacts

Next Story

Recent News

WSU Core-to-Career program announces members of third cohort

Twenty-one Washington State University faculty have been named as the newest members of the Core-to-Career professional development program that impacts undergradutes’ career readiness.

Sharing American political and judicial expertise overseas

Recipient of a Fulbright Senior Specialist award for a three-week visit to Slovakia, WSU’s Cornell Clayton held a series of lectures for graduate and undergraduate students focusing on contemporary American politics.

College of Education appoints Eric Johnson as associate dean

Eric Johnson, an English language learners professor, will begin his two-year term on Aug. 16 and will focus heavily on faculty and staff professional development aimed at fostering an inclusive and equitable educational environment within the college.

WSU lab joins network identifying new pathogens

As part of the $1.7 billion Pathogen Genomics Center of Excellence, the Washington Animal Disease Diagnostic Laboratory will play a key role preventing the spread of disease-causing pathogens, including new COVID-19 variants.

Find More News

Subscribe for more updates