Locally owned grocers Rainbow Blossom, Paul's Fruit Market expand amid supermarket battles

Twenty years ago, Summer Auerbach wasn’t sure if her family business would make it.

Rainbow Blossom opened its doors in 1977, evolving from a restaurant and caterer into an established natural foods and wellness products retailer.

It found a successful niche in the Louisville area. But when national natural food store Wild Oats opened its first store in Louisville in 2003 and Whole Foods followed in 2004, sales at Rainbow Blossom fell by half.

“I kind of came in because we were facing a lot of competition,” Auerbach said. “It seemed almost impossible that we were going to be able to survive that.”

Having newly joined the family business alongside her father and company co-founder Rob Auerbach, Summer Auerbach knew something had to be done.

They doubled down on their family business, opening their first store in southern Indiana in 2005. It eventually added yoga classes and educational sessions and began hosting a farmers market to diversify its offerings.

“It helped us plant the flag and also send a message to the community that was like, ‘We're not going anywhere, and in fact, we're growing,’ and I think that that really kind of helped shift or change the public perception,” said the second-generation owner.

Now in its 47th year, Rainbow Blossom survived that challenge and continues to grow in the face of new competition.

The battle for grocery budgets in Louisville has heated, with Florida-based Publix opening its first Louisville store earlier this year (with more on the way) and Iowa-based Hy-Vee also intending to expand to Jefferson County.

Still, locally owned-grocers in Louisville are expanding amid this influx of competition. Rainbow Blossom is readying to open a sixth location this summer.

The new location, 4946 Brownsboro Road, was recently vacated by another locally owned grocer, Paul’s Fruit Market, which is also in a growth phase. Paul’s left the space to move nearby, 4990 U.S. 42, for a site double the size.

“There's so much of the same everywhere, but I think customers are looking for things that are unique and tell a story and are small,” Summer Auerbach said. “And I think that we are able to deliver that in a way that these big box stores just can't.”

Keeping shelves stocked with what consumers want

Keeping customers at the heart of their operation is a key to the success of Rainbow Blossom.

Through regular surveys, Rainbow Blossom tries to keep a pulse on what its customers want and why they continue to shop there.

“One of the things that has consistently been the highest ranked, like every single time it's come in over 80%, our customers say that they shop with us for a unique selection they can't find anywhere else,” she said. “We work with a lot of local farmers, a lot of local vendors.”

Summer Auerbach said certain product standards, including 100% organic or local produce, along with its focus on wellness products, help differentiate the store’s offerings from competitors.

“The people that are kind of the core natural consumers, they see the difference,” she said. “I think that really kind of helps separate us.”

The shop also helps new brands get their product in front of a wider audience, offering coaching and resources to get them retail-ready, Summer Auerbach said.

“We're often the first place that people are able to get on the shelf,” she said.

She pointed to Phocus energy drinks, Elixir Kombucha, and Louisville Cream as examples of popular locally-owned food and beverage companies Rainbow Blossom stocked early in those product’s histories.

Rainbow Blossom, Paul's expands in East End

Plans for a sixth location of Rainbow Blossom have been in the works since 2019, though the COVID-19 pandemic temporarily put those on pause.

For all its challenges, the pandemic presented an opportunity to win new customers, Auerbach said, particularly those looking for less crowded shopping options with more curated selections.

“I think a lot of those people, once they saw how easy it is or how much we offered ... they just stayed,” she said.

When she learned that the Brownsboro Road Paul’s location would become available, she knew it would make for a good fit, as it was already set up for use as a grocery store.

Renovation work in the coming months will focus on giving the space “a big face-lift inside and out,” to include a “blossom bar,” which will offer fresh smoothies, cold-pressed juices, and made-to-order smoothie bowls.

The company already has stores in St. Matthews, the Highlands, Springhurst, Middletown, and New Albany, Indiana. Its New Albany store is undergoing renovations to quadruple produce offerings, expand its selection of frozen items by 50%, and add a blossom bar.

The expansion comes as supermarkets, both established and new-to-market, are growing their footprint in the area.

Publix opened its first Kentucky location in January at 2500 Terra Crossing Blvd. and is working to open two additional stores in Jefferson County.

Hy-Vee has previously announced plans to open at the largely undeveloped SouthPointe Commons retail center, 7405 Bardstown Road.

Established market force Kroger, headquartered in Cincinnati, has invested millions in store renovations in recent years and is building a new location at 10010 Ballardsville Road, directly across the street from an announced future Publix location.

That’s not to mention the planned early 2025 opening of Massachusetts-based BJ's Wholesale Club, replacing the Sears department store anchor at Jefferson Mall on Outer Loop.

North Carolina-based The Fresh Market is also opening a second Louisville location, moving into the former Barnes & Noble storefront at Paddock Shops, off Brownsboro Road.

“I feel like obviously any time you learn about a new competitor coming into town, it makes me feel like we need to brace ourselves or make sure that we have our ducks in a row to be ready to compete,” Summer Auerbach said.

But those big supermarkets and warehouse stores, while popular, aren’t catering to the same customers as Rainbow Blossom, she added.

Paul’s Fruit Market declined to comment for this story, though the Courier Journal previously reported that in its recent expansion, Paul’s nearly doubled its square footage, adding more frozen and ready-to-eat foods, a bigger floral section, and additional tablet computers around the store for customers to order from the deli.

Even locally owned shops tend to find their own niches to differentiate themselves, Summer Auerbach said, but they do overlap in offering a more intimate shopping experience.

“Not everybody wants to go into a big overwhelming store where it's this thing and you're gonna stand in a long line and you're gonna have to fight for a parking spot,” she said. “I think we really focus on the ease of experience and how we can help people get in and out.”

What also helps set Rainbow Blossom apart, and what keeps customers coming back, she said, is well-informed employees who forge connections.

“We really recognize that so much of the stuff we sell people can get online, particularly when it comes to supplements and wellness products,” she said. “But we have a really knowledgeable staff, we're friendly, and I feel like we go out of our way to help people find what they're looking for. And our goal is to have people leave feeling better than when they came in and feel like they were really able to make that connection.”

Growth & development reporter Matthew Glowicki can be reached at mglowicki@courier-journal.com, 502-582-4000 or on Twitter @mattglo.

This article originally appeared on Louisville Courier Journal: How local grocers like Rainbow Blossom survive amid supermarket battles