Abstract
Brand activism has emerged as a high-stakes marketing strategy wherein firms take explicit stances on contentious socio-political issues, frequently triggering consumer boycott campaigns. While substantial research examines the financial penalties borne by focal activist brands, the competitive externalities and market-level reallocations induced by these events remain underexplored. This study investigates the spillover effects of retail brand activism boycotts on rival firms' sales performance and brand equity. Exploiting a series of exogenous boycott shocks across multi-category national retail chains between 2018 and 2023, we implement a natural experiment framework combining store-level scanner transaction data with high-frequency consumer brand perception tracking. Employing staggered difference-in-differences and event study specifications, we document a statistically significant and economically meaningful immediate spillover effect: direct rivals capture an average 4.8% increase in weekly dollar sales during focal boycott campaigns, driven primarily by brand-switching among politically misaligned consumers. However, equity spillovers are asymmetric; while neutral competitors experience volume gains, their affective brand equity remains largely unchanged unless they actively court boycotting consumers, which conversely elevates long-term polarization risks. These findings bridge microeconomic substitution theory with strategic brand management, offering actionable insights for competitive positioning in polarized market environments.
