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Friday, December 07, 2018

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Friday Eye-Opener: Cold Outside


by Kevin Coupe

Okay, here’s a controversy that, I suspect, most of us didn’t see coming.

A number of radio stations have decided to ban then playing of “Baby, It’s Cold Outside,” the forties-era Frank Loesser classic Christmas song that’s been covered by pretty much everybody. (The video at left is the first time it was played in the movies, performed by Ricardo Montalban and Esther Williams, and then Red Skelton and Betty Garrett, in Neptune’s Daughter, released in 1949.)

The reason? There is a growing sense among some that the lyrics, which used to be seen as an innocent winter flirtation, now hint at date rape - one member of the duet (usually, but not always, the male) won’t take “no” for an answer, while the other (usually, but not always, the female), at one point sings, “What’s in this drink?”

Nobody actually is arguing that Loesser wrote it as a date-rape anthem. He actually originally wrote it to perform, with his wife, at Christmas parties.

But some radio stations, urged to take another look at the lyrics by feminists and proponents of the #MeToo movement, have taken it out of the holiday song rotation. Of course, there was a backlash to the backlash, with others demanding that the song be played as usual, saying that this is a matter of political correctness run amok.

To be honest, when I read about this controversy, my first instinct was to agree with the latter perspective. “Baby It’s Cold Outside” offensive? Really? I’ve always loved that song.

Hell, it’s even been a Gap commercial featuring Selma Blair & Rainn Wilson (in a reversal of the usual roles).

Then I watched the Neptune’s Daughter video. I listened to a couple of renditions.

And I get it.

Do I think some people are being incredibly sensitive about this? Yes.

But you know, our culture has spent a lot of years being incredibly insensitive about this kind of stuff. We didn’t pay attention to offensive behavior by a lot of people. We didn’t pay attention to winks and smiles that went along with this behavior. We didn’t listen to victims, and we gave the benefit of the doubt to predators.

Times have changed.

Yes, people are being sensitive. They have every right, and if they want to tell radio stations that they think this song ought not be played on the airwaves, they should. Radio stations then can make their own judgements about whether they want to listen.

I would. After all, if people want to listen to any rendition of “Baby, It’s Cold Outside,” they have options other than the radio. (There are dozens of versions available on iTunes.) Businesses ignore passionate customers at their own peril.

My personal opinion - it is incumbent on society to listen to the voices of people who used to be unheard or ignored, and to be sensitive in ways we never used to be. It doesn’t really hurt anyone, and it could help.

I am willing to have my Eyes-Opened, if only because it helps me see things differently than I my have in the past.

Nothing wrong with that. And there’s a lot right with it.


Walmart Expands Its Sales Palette In New Directions

Walmart said yesterday that it is buying Art.com, described as one of the largest global online purveyors of art and wall decor, with $300 million in annual sales.

Terms of the deal were not disclosed.

It is, CNBC reports, the addition of yet another digital brand to its widening portfolio, and a way of “bolstering its home decor business.”

Among the other digital brands that Walmart has acquired in recent years: Jet, Moosejaw, Bonobos, ModCloth, Eloquii and Bare Necessities.

CNBC writes that Walmart “will continue to run Art.com as a standalone website and wouldn't comment on its plans to add merchandise from Art.com to Walmart stores. The website has roughly 2 million designs to chose from, and growing, according to Walmart.”

Meanwhile, Twice.com reports that Walmart “has developed an expansive line of fashionable tech accessories that it’s selling exclusively” on its website.

The story says: “Dubbed Motile, the lifestyle brand boasts more than a dozen products at launch, including a faux leather backpack and travel bag with embedded 10K mAh wireless chargers; QI wireless power banks and fabric charging pad; a foldable bluetooth keyboard; iPhone cases; and colorful Lightning cables with faux leather bands, sporty lanyards or tasseled keychains.”

Walmart describes the collection as “smart accessories for an untethered world.” The story notes that “with Motile, Walmart may have taken a cue from Target, which last spring launched a private-label collection of boldly patterned headphones and accessories under the Heyday brand.” And, of course, there is the Amazon Basics line of accessories.

KC's View: Walmart continues to surprise. I’m not quite sure of its ability to delight, but I think it is important to remember that in most of the deals it makes, it is acquiring not just businesses, but talent … and is developing a ton of bench strength that could help drive the company in innovative and entrepreneurial directions in the future.

And that’s a big deal.

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C&S Acquires Olean Wholesale Grocery Coop

C&S Wholesale Grocers announced yesterday that it has signed an agreement to acquire Olean Wholesale Grocery Cooperative, based in Olean, NY.

Terms of the deal were not disclosed. The sale is expected to close in early 2019.

Olean was founded in 1922, and services more than 270 independent food retail and convenience stores throughout New York, Pennsylvania, and Northeast Ohio.

KC's View: Another example, I think, of how the big are going to have to get bigger, and the small are going to have to find ports of harbor in which they can be protected from the competitive storms. This is all about survival.

Walgreen Inks Next Day Rx Delivery Deal With FedEx

TechCrunch reports that Walgreen has signed a deal with FedEx that will allow customers “to get prescriptions delivered to their home as quickly as the next day. Customers will get a text notification when prescriptions are filled and can opt to get them sent to their home or pick them in one of the company’s locations via an Express pickup line.”

What this means is that Walgreen is “stepping up its services to compete with both established pharmacies and newcomers in the space. Walgreens’ chief competitor (and top U.S. chain) CVS struck a partnership with the U.S. Postal Service early this year. Like Walgreens Express, CVS’ offering runs $4.99 for a delivery, with a one- to two-day turnaround time.

“Amazon, meanwhile, acquired pharmacy startup PillPack over the summer, with plans to disrupt the drugstore business with online prescription shipping.”

Walgreen already offers same-day delivery in cities such as New York, Chicago, Dallas, Miami, Gainesville, Tampa and Fort Lauderdale, with plans to expand the list next year.

KC's View: It is fascinating to watch all the deals and alliances being struck, almost every day. It was just two days ago that Kroger announced it would start putting mini-Kroger sections in Walgreen stores.

Everybody is maneuvering around the game board, trying to figure out to advance past or leap-frog the competition, all the while knowing that the bar constantly gets moved because ]everybody else is trying to do the same thing.

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From the National Grocers Association...

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Lampert Bids $4.6 Billion To Buy Sears Out Of Bankruptcy

Bloomberg reports that hedge funder Eddie Lampert, the former CEO and current chairman of Sears Holdings, has offered to buy the company out of bankruptcy for $4.6 billion.

Lampert is Sear’s biggest shareholder and already its biggest creditor, through a series of loans it has made to keep the company alive and functioning over the years. Bloomberg writes that Lampert’s new bid is contingent on ESL Investments - Lampert’s hedge fund - “being released from liability related to any of its prebankruptcy transactions, according to the filing.”

His new bid “could include a mix of cash, equity loans and debt swaps. Lampert would take over the whole company, rather than just buying selected stores as originally planned, and preserve about 50,000 jobs, according to the documents” as reported by Bloomberg. The story notes that “the new bid is designed to head off outright liquidation of Sears. The company has struggled to get support from lenders and suppliers who aren’t sure the iconic retailer can survive, and Lampert’s new bid may not quell those doubts.”

However, the story also notes that this may be more an effort to preserve equity than save the company, quoting Burt Flickinger, managing director of Strategic Resource Group, as saying that “the deal would hand Lampert more money and professional fees while the equity holders and lenders would see their investments evaporate. ‘The longer Lampert stays, the more Sears and Kmart’s combined viability is impaired,’ Flickinger said. ‘He’s trying to perpetuate himself almost as an undertaker to drain more blood out of the body and make more money as he’s doing it’.”

KC's View: First of all, I totally believe what Burt Flickinger says. I almost always do, and this is no different.

It is hard for me to imagine any end game in which Sears - outmoded, obsolete, myopic, isolated and largely mismanaged almost from the moment Lampert invested in the company - can survive except over the short-term as Lampert sucks whatever blood he can get out of it.

Know who I really pity? Whatever company is his next victim, once Lampert has drained Sears of all life, cast aside the carcass, and looks around for someplace else to invest.

Former Tesco Execs Cleared Of Fraud

The New York Times reports this morning that “two former executives at the supermarket chain Tesco have been acquitted of fraud and false accounting charges after a judge ruled there was not enough evidence for a jury to consider the case against them.

“The executives, Christopher Bush, who led Tesco’s British division, and John Scouler, an executive in the same unit, had been charged by Britain’s Serious Fraud Office after a 2014 investigation into accounting irregularities at the grocery chain.” Those charges stemmed from accusations that the company had understated expenses and overstated revenues.

“Tesco said at the time that it did not believe that any of those implicated had benefited personally, but eight executives were suspended and the chairman, Richard Broadbent, was forced to step down,” the Times writes, noting that Tesco also paid millions in fines.

KC's View: Good lesson here. I’ve been very critical of Tesco’s behavior, and just assumed that these guys would be found guilty. Tesco still behaved badly, but I was wrong about Bush and Scouler … I shouldn’t have assumed anything.

E-conomy Beat

• The Wall Street Journal reports that “Alibaba Group Holding Ltd. and Amazon.com Inc. are squaring off in Europe—and not just in e-commerce but also in the quickly growing cloud-computing market.

“The Chinese company’s competition with Amazon, the world’s biggest cloud-computing player, reflects how Europe is turning into a battleground between China’s tech giants and Silicon Valley.”

The story goes on to point out that “Alibaba opened its second and third European cloud-computing centers in October—both in London—as it tries to build a customer base for its cloud division … Amazon, which also competes with Microsoft Corp. and Alphabet Inc.’s Google in cloud computing, isn’t standing still. It announced a new AWS data center in Italy last month and has said it will add jobs in the U.K. to work for the division.”

Everybody else has a way to go, though … because Gartner Group says that Amazon has a 51.8 percent share of the global cloud computing market.

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Corporate Drumbeat

From Samuel J. Associates...

"It’s a bad time to be in the business of selling groceries, and the headlines are as bleak as you’d expect: "The Retail Apocalypse Is Coming for Grocery Stores" ... "Grocery Retail ‘Bloodbath’ Is Here" ... Conversely, it is a great time — arguably the best time ever — to buy groceries."
- New York Magazine/Grub Street


At Samuel J.Associates, we have a response to this assessment:

Bull.

We think it is a great time to be selling groceries, whether you are a retailer or a supplier. That’s because a more educated and demanding consumer, no matter the demographic, will reward businesses that are innovative, disruptive, and in touch with what people need, even if they don’t know they need it.

And, we know this: Those businesses require, and are fueled by, great people.

People who don’t just get the job done, but who set the tone in an organization, establish cultural and business priorities, who build teams, and who are able to not just adapt to competitive realities, but see the future and thrive in it.

And yes, ignore dire warnings about a "retail apocalypse" and see opportunities.

At Samuel J. Associates, we have a winning record of connecting great talent and innovative businesses ... as well as innovative talent with great businesses. We exceed your expectations so that you can do the same thing for your customers.

No bull.

Click here to find out more.

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FastNewsBeat: Campus Edition

…with brief, occasional, italicized and sometimes gratuitous commentary…

NBC News reports that Publix has opened its first store on a college campus - at the University of South Florida in Tampa. The unit is a 28,000 square-foot unit, with about a third of the employees being college students. The store is said to have full-service seafood and floral departments.

I love the idea of a store on a college campus. But this also tells me how much college students have changed since I went to college … I don’t remember having much need for a full-service floral or seafood department when I was in school. Mostly, I bought beer.


• The Columbus Dispatch reports on how Ohio State University has a new benefit for students and staffers - a bacon vending machine.

The bacon being vended is cooked and shelf-stable. And probably perfect when cramming for exams.

According to the story, “The Ohio Pork Council, a trade group for the state’s pork producers, is sponsoring the vending wonder and received bacon donations from the biggest names in pork belly: Smithfield, Hormel and Sugardale. There are strips and bacon bits (each $1) in the machine, which will be stocked by students in Ohio State’s meat science program, which will receive the proceeds of the vending machine sales.”

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From WAFC...

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Now Online: A Special Panel About Supply Chain Innovation

Last evening’s panel discussion about Supply Chain Innovation, which I had the opportunity to moderate at Venture Cafe Kendall, located in the shadow of MIT in Cambridge, Massachusetts, was fascinating, I thought, and if you’re interested in watching the video on facebook, you can do so here. (You’ll have to scroll down a bit…there are a number of videos posted.)

Our panelists included Eva Ponce, Executive Director, MITx MicroMasters in Supply Chain Management … Andre Shaw, Senior Vice President with Ahold Delhaize’s Retail Business Services … and Giddy Abboud, Innovation Manager at Ahold Delhaize’s Stop & Shop.

The Ahold Delhaize connection was because it actually was Ahold Delhaize that sponsored the event. Venture Cafe is a space that encourages and facilitates connections among innovators, entrepreneurs and startups with existing and established businesses - the idea is to create networks that can both give birth to ideas and raise them so that they become functioning, flowering initiatives, strategies and tactics. I give Ahold Delhaize a lot of credit for wanting to be part of this process, and actively seeking out the people and ideas that it knows could be the next secret sauce that could change its business.

Which brings me to one more thing, as a point of personal privilege. When I got the call asking me to moderate this panel, I was, to be honest, astounded to find out that it was the folks at Ahold Delhaize who recommended me, and wanted to be on a panel that I was moderating. If you’ve been reading MNBV for any length of time, you’ll know that I haven’t always been kind to Ahold Delhaize, and have been particularly tough on Stop & Shop, especially the one near my home where I’ve found various problems over the time. (I’ve tried to use Stop & Shop as an example of problems that I know occur in other stores, but that doesn’t make it easier for them.) And yet, they wanted me. I’m not sure I would’ve been as accepting if our positions had been reversed.

I asked Giddy Abboud of Stop & Shop about this, and she laughed. “No, that’s why we wanted you,” she said, pointing out that it is only through honest, constructive criticism that the company can get better.

I admire that. And I really wanted to say so. Publicly.

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From Webstop...

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From ReposiTrak...

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Your Views: Dog Days

Got the following email from an MNB reader:

This is my first email to you, though I do read MNB almost every morning.  The Kroger pick up test at Walgreens in Northern Kentucky is a little peculiar to me.  I live in Northern Kentucky.  There’s a Kroger just about every 4 miles, some are even closer to each other.  In my county (since that’s how people reference where they’re from in KY) there are 4 Krogers (one probably in the top 25 for dollars in the US).  There are 3 Walgreens – they are within 0.5, 0.8 and 2.2 miles to their nearest Kroger.  I just have a hard time believing someone would rather stop at their local Walgreens rather than their Kroger for their pick up order, where they’ll bring it to your car at the local Kroger, especially if you think you may have an issue with you order.

With all of that said,  I would 100% stop at my local Walgreens to pick up broccoli for dinner after work if it meant I didn’t have to deal with Kroger’s always poorly designed, fully packed parking lot on my way home from work.

Also to note, Kroger’s largest competitors in Northern Kentucky are Walmart and Meijer – there are 3 Walmarts, 2 Meijers in the 3 counties in Northern Kentucky.  Kroger has a total of ~15 locations in those same counties.  I mention this just to say that when you go grocery shopping, I’d say 95% of people in the Cincinnati DMA shop at Kroger, which is not necessarily the same grocery landscape as the rest of the US.

I’m sure Kroger being headquartered right across the river from Northern Kentucky knows the market, so surprising they’d select it. Though, I’m sure they know better than me.


I think Kroger probably chose Northern Kentucky because it is close to headquarters, and they can easily evaluate the logistics issues. It is just the launching pad for a much bigger initiative.



Got the following email about the company in Japan that has been testing out the use of robots in a restaurant … except that in this cafe, they’ve hired paralyzed people to control the robots from their beds and chairs, even from their homes. The controls are customized for people’s specific disabilities, and the system allows them to interact via then robots with society, not to mention earn a paycheck.

One MNB reader responded:

Wow, I'm gobsmacked as well.

What a remarkably innovative way to help improve people's sense of self worth and social lives.




Regarding Dollar General’s growth plans, MNB reader Bob Vereen wrote:

Having driven through some small towns in which Dollar General operates, seems to me its growth in those markets should be much more successful than in major cities or suburbs where there is much more competition.



Got several emails responding to yesterday’s FaceTime about the morgue-like atmosphere, even at Christmastime, at my local mall, the Stamford Town Center in Connecticut.

One MNB reader wrote:

I live in Newport Beach. We have two malls nearby, Fashion Island and South Coast Plaza. Both are thriving… it’s challenging to find a parking spot. These malls have been thriving for 50+ years. Who knows all the reasons why, but I do know they are well managed… plenty of parking, ultra clean, well maintained with plenty of interesting retails shops. There are certainly more food choices over the years that are available in these malls and there is a constant change of mix of retail offerings that make for a compelling shopping experience. My guess is that like all businesses much for their success or failure depends on the quality of management. Both malls are privately owned by forward thinking, well-funded individuals. I suspect there will always be a place for quality brick and mortar retail.

The key is being differentiated and quality-driven.

MNB reader Stacy McCoy wrote:

I have to say my experience with our Mall in Central Illinois the past couple of weeks was just the opposite (much to my surprise and delight). I have been there twice in the past 2 weeks (once on a week night, and once on the weekend). The parking lots were more than 50% full, and the traffic in the mall was crowded. I was really surprised. The Bath and Bodyworks store was having an event that was so big on Saturday, that there was a roped line of customers waiting to get INTO the store. They were actually at capacity, and could not let any more customers into the store until a customer had actually left the store. It was clearly a planned event, as they had plenty of staff on hand to handle the excess crowd, and had the organized rope line set up in front of the store to accommodate customers that were waiting to get into the store in an organized fashion. To your point, they planned a sales EVENT to get customers physically into their store. And I think that the whole Mall benefitted from the extra traffic that day.

But, from another MNB reader:

I went to the mall last night in Boise, Idaho- and parked right up front.  It was pretty quiet, with hardly anyone there too.  Yes, I realize I live in Idaho, but our mall usually is slammed this time of year. I was telling my 70 year old mother about this, and she asked if they could walk the dog there.  It's cold, we have ice on the ground, and the mall has music and would be nicer. 

I don't think you can, but it got me thinking.  Maybe there should be times where you can walk the dog.  I know it brings up the whole clean up issue, but it would get people in there.  And make a play land for dogs, near the Starbucks, and maybe we are on to something …


So if we write about malls going to the dogs, it’d be a positive?

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From Portland State University...

Here ya go!

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From The MNB Sports Desk

In alliterative Thursday Night Football action, the Tennessee Titans defeated the Jacksonville Jaguars 30-9.

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“RETAIL 2020: What’s The Future (WTF)?” - A New Presentation by Kevin Coupe

In this fast-paced, interactive and provocative presentation, MNB's Kevin Coupe challenges audiences to see the fast-evolving retail world through a radical new technological, demographic, competitive and cultural prism. These issues all combine to create an environment in which traditional thinking, fundamental execution, and just-good-enough strategies and tactics likely pave the path to irrelevance; Coupe lays out a road map for the future that focuses on differential advantages and disruptive mindsets, using real-world examples that can be adopted and executed by enterprising and innovative leaders.

Constantly updated to reflect the hand crafted news stories covered and commented upon daily by MorningNewsBeat, and seasoned with an irreverent sense of humor and disdain for sacred cows honed over 30 years of writing and reporting about the best retailers and retail strategies, “RETAIL 2020/WTF” will get your meeting attendees not just thinking, but asking the serious questions about business and consumers that serious times demand.


Here’s what Joe Jurich, CTO of DUMAC Business Systems, has to say about a recent appearance:

”Kevin recently participated in and spoke at our Annual User Conference.  Our group consisted of independent retailers, wholesalers, and software vendors – a pretty broad group to challenge in a single talk.  While his energy, humor, and movie analogies kept the audience engaged, his ability to challenge them to think differently about how they go to market is what really captured them!  Based on dinner conversations afterward, he appeared to have left everyone thinking of at least one new approach to their strategy!”

Want to make your next event unique, engaging and entertaining? Contact Kevin at kc@morningnewsbeat.com , or call him now at 203-253-0291.

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OffBeat: Reacher Time

It isn’t just a consistent pleasure that every year, just around this time, Lee Child comes out with a new Jack Reacher novel. As he has matured as a writer, Child also has used the regularity of his output to challenge himself to take different approaches to the books. Because the series - now 24 novels long - is rooted in an essentially rootless character, wandering the backroads of America, he to a great and almost surprising extent has been able to avoid narrative formulas.

The newest, “Past Tense,” starts with former MP Jack Reacher deciding to travel - via bus and occasionally by hitchhiking - from Maine to San Diego in search of warmer winter weather. But he is distracted by a road sign pointing to Laconia, New Hampshire, which he only knows as the place where his father was born. Curious, and in no particular hurry, Reacher decides to take a short detour.

Which, needless to say, isn’t as short as intended. Because the detour ends up being not just geographic, but also into a family history which diverges from family legend.

At the same time, and this is where Child challenges himself, “Past Tense” has a parallel narrative about a Canadian couple on their way to New York City. They end up taking a detour as well because of the breakdown of their car, and they end up staying in a motel near Laconia. Needless to say, their stay isn’t as short as intended …

I’m not entirely sure that the two-track narrative works; to be honest, unlike most Reacher novels, it took me a little time to get into the book. Normally, I like to settle in by the fireplace and give myself lots of time to enjoy the ride on which Child is going to take me starting on Chapter 1. This time, it took me until about Chapter 5 or 6 to get really engaged … but the fire was warm, the bourbon was soothing, and eventually I couldn’t put it down.

“Past Tense” doesn’t have the emotional resonance of last year’s Reacher novel, “The Midnight Line,” which had a soulful quality about it. But it, as always, is a great ride. Enjoy.



In Boston overnight for the Venture Cafe Kendall panel discussion about Supply Chain Innovation, I went back to my hotel to do some MNB writing. But after a while I got hungry and needed a walk, and so I bundled up and walked east along the Cambridge side of the Charles River and then crossed over into Boston where, for the first time, I honestly felt the Christmas spirit. (We haven’t put up any decorations yet, largely because we know the new puppy will just pull them down. Haven’t quite figured out how to adjust, but we’re working on it.) Boston was resplendent, and as I walked through the city, it was fun to see now just all the trees decorated and blinking, but also to see people going to parties, carrying presents, and hanging with friends and families. Just felt good. And warm. Few things better than a great city at the holidays.

I found myself thinking of lines from Robert B. Parker’s Spenser novel, “Silent Night,” which takes place at Christmas in Boston. (Parker was said to be working on the novel when he passed away, and it was completed - not really successfully, in my view - by his longtime agent, Helen Brann. But you can pretty much see where Parker ends and Brann begin in the book, and these lines sound like vintage Parker.) “I liked the myth elements of Christmas,” Parker wrote, in Spenser’s first-person narration. “The way in which it origins reach back far beyond Jesus, to the rituals of people unknown to us. The celebration of the winter solstice. The coming of light in the darkest time. And with it the promise of spring to come and beginning again. I liked it better than Rudolph the Red-Nosed Reindeer.”

But I was still hungry, with no particular destination in mind. But I saw a place called the Island Creek Oyster Bar, which I’ve never patronized before, but somehow it seemed appealing. And warm, on a night in which the cold wind was picking up. And there was room at the bar.

I went in, found a seat and settled in, and enjoyed a late evening meal that I can only described as somehow perfect. I started with a glass of the 2017 Folk Machine Pinot Noir, from California’s Central Coast, which was smooth and comforting. Then I enjoyed a pair of oyster sliders, served with chili lime aïoli, which went down easy, and then followed it up with a salmon tartare, served with cucumber, sesame, red onion, and chive … just extraordinary. I managed another glass of wine, but knew I had to get back to my hotel and MNB.

I didn’t walk, though. I used Lyft. Even I have limits.



That’s it for this week.

Have a great weekend, and I’ll see you Monday.

Sláinte!

PWS 52