Operating profit at Hard Rock cafes dropped by 38.3% in the six months to June 30, the chain's owner Rank said, as lower tourist numbers, especially in Europe, hammered sales of food and merchandise. Overall like-for-like sales fell 6.3% with the previously strong European cafes particularly badly hit.

The fall was a "significant improvement" over the fourth quarter of 2001, Rank said, but sales are still being hurt by lower levels of travel and tourism, especially merchandise sale, down 12.3% overall and almost 22% in Europe.

European cafes have been most affected by the slowdown in tourism, with like for likes down 11.9% and Paris and Rome have been particularly affected. Before 11 September 2001, the European cafes had seen like for like sales growth for two successive years, Rank said. In North America, the fall was worst in four cafes, New York, Washington DC, Orlando and Hollywood. However, Rank said, sales trends have continued to improve since the end of June.

Chief executive Mike Smith said the group's efforts to improve local market penetration have enabled it to restrict the impact on the food and beverage business, where like-for-like sales are down only 1.7% in the first half.

Plans for Hard Rock include not only the development of additional cafes but also brand extensions into hospitality and gaming, the company said. The first UK Hard Rock casino opened in Manchester in July, with the second scheduled to open in London in December.

On the Hard Rock hotels side, Rank said the Seminole Indian Nation hotel/casino development was under way, the Orlando hotel "continues to trade well" and the Chicago hotel is on schedule to open in 2003. Overall first-half pre-tax profits at Rank Group were up 3% at £85.1m.

Hard Rock p&l 6 months to June 30 2002
Turnover 2002 (%change); Operating profit 2002 (% change)
• Owned cafes: £115.2m (-5.6%); £15.8m ( -30%)
• Cafe franchise and other income: £3.3m (-8.3%); £3.3m (-19.5%)
• Hotel franchise and other income: £1.9m (+11.8%); £1.4m (+16.7%)
• Territory sales: £1.1m (-67%); £1.1m (-67%)
• Total after overheads: £121.5 m (-7%); £14.8 (-38.3%)

Hard Rock like for like sales 6 months to 30 June 2002
Food and beverage; Merchandise; Total
• North America: -1.5%; -9.9%; -5.1%
• Europe: 3.0%; -21.8%; -11.9%
• Total: -1.7%; -12.3%; -6.3%
• 9 weeks to 1 September 2002: +1.6%; -11.6%; -4.4%