Alternatively you could just kill Eola right when you meet her. That automatically fails the quest, Brother Verulus lives and rewards you, and none of the cannibal shopkeepers in Markarth have to die, so it's a win-win... unless if you specifically wanna kill them all, then it's best to do things the way Ottoman said.
Yes you can kill Eola and the cannibals right up to the point that you're requested to feed on Verulas' flesh. The shopkeepers replacements in Markarth will not sell you anything and will not be friendly if you do though. Thats fixable with console commands at least.