An escape to the pictures has traditionally been regarded as an economical form of entertainment; the thing to do at the end of the month after a spell of drinking and dining out in the weeks after payday. And despite steadily increasing prices at the movie theatre, former Cineworld non-executive director Peter Williams still believes this to be the case.

“I’ve always felt that the ticket price or headline ticket price is almost too low really,” he recently told the BBC.

“I mean, it is still a very cheap night out.” 

A mid-week trip earlier this month on the outskirts of Glasgow to see Bullet Train came in at £28 for a pair of tickets, and about the same again for a couple of movie meal “deals”. With strong Tarantino vibes including black comedy, abstract characters, comic book violence and plenty of action, it was a thoroughly enjoyable evening but it was not what a great many people would describe as “cheap”. 

Herein lies one of several considerable challenges facing Cineworld, which looks set to follow movie theatre rival Vue into a significant financial restructuring as the industry emerges from the lockdown era of Covid. 

Shares in London-listed Cineworld lost a further fifth of their value yesterday after the world’s second-largest cinema chain confirmed that it is considering options including a possible bankruptcy filing in the US as it struggles to cut debts that soared during the pandemic. The company operates 751 sites in 10 countries, including cinemas in Aberdeen, Dundee, Falkirk, Edinburgh and Glasgow.

READ MORE: Cineworld shares routed as chain warns of ‘very significant dilution’

The group, which also owns the Picturehouse chain in the UK, has laid the immediate blame for its misfortune on a near-term shortage of big-budget films that have left audience numbers adrift of levels prior to the onset of Covid.

Films such as the latest Top Gun outing made more than £65m in the UK in June alone, while movies such as Jurassic World Dominion and Minions: The Rise of the Gru have also performed well, but the late summer schedule has been thin on the ground for the type of fare that multiplexes specialise in.

“Despite a gradual recovery of demand since reopening in April 2021, recent admission levels have been below expectations,” Cineworld said in a trading update last week.

“These lower levels of admissions are due to a limited film slate that is anticipated to continue until November 2022 and are expected to negatively impact trading and the group’s liquidity position in the near term.”

The situation is not unique to Cineworld. Global box office takings in 2019 hit a record $42.5 billion (£36.1bn) according to media analytics giant Comscore, buoyed by films such as Avengers: Endgame and Frozen 2. But takings so far this year are down by 32 per cent compared to the same period in 2019.

Industry hopes are now riding on Avatar: The Way of the Water, which is scheduled for release in December. One of the big questions in whether UK consumers will by then be in the mood for many cinema outings as dramatically higher energy bills kick into top gear, further inflating prices for goods and services across the board.

READ MORE: Warning on interest rates as forecast predicts inflation to top 18%

The rate of inflation surged to a fresh 40-year high of 10.1% during the 12 months to July, up from 9.4% in June, marking the biggest jump in the cost of living since February 1982.

In its latest monetary policy report, which made for extremely dire reading, the Bank of England predicted consumer price inflation (CPI) will rise to more than 13% in the fourth quarter of this year. The Bank is further predicting that the UK economy is headed into a 15 month-long recession. 

Benjamin Nabarro, senior economist at global investment bank Citi, issued an even gloomier warning to clients yesterday with his prediction that CPI will peak at 18.6% in the early part of next year following a further increase in the energy prices forecasted by analysts at Cornwall Insights. Mr Nabarro said this could force the Bank of England to push interest rates to as high as 7% to bring surging prices under control. 

Any increase in unemployment triggered by the forthcoming recession would ease the UK’s shortage of workers and dampen wage demands, giving Bank officials a bit more breathing space on interest rates rises. 

But no matter which way you cut it, the vast majority of consumers are headed for a considerable amount of financial pain. A few hours of escapism at the cinema might be exactly what they want, but whether they’ll be able to afford it is another matter altogether.

READ MORE:Government on a 'war footing' as inflation soars to a 40-year high in deepening cost of living crisis 

Movie theatre chains have also been battling for eyeballs with a host of contenders such as Apple, Netflix, Disney, Amazon and more following the rise of streaming services during lockdowns. 

After a row in 2020 with Universal Pictures, which released Trolls: World Tour online at a time when theatres were closed by the pandemic, Cineworld subsequently signed a deal with Warner Brothers guaranteeing to show films in the cinema before they are streamed. And while the recent sharp fall in subscribers at Netflix proves that streamers aren’t immune to the cost-of-living crisis, the price of bringing movies into the home is considerably more cost-effective than going to the cinema. 

Against this backdrop Cineworld is considering “strategic options” to bring its £4bn debt pile under control. With a current market capitalisation of less than £140 million, this will assuredly wipe out nearly all the remaining value of shares held by existing investors. 

Smaller international rival Vue was forced to slash its valuation by half earlier this year following a £1bn restructuring deal in which its lenders took control of the business, wiping out the group’s previous majority owners. The world’s largest cinema chain – Odeon Cinemas owner AMC Entertainment of the US – is also carrying a hefty £4.7bn of debt on its balance sheet, so it’s reasonable to imagine there could be another act to come in this industry drama. 

Hopes were raised that superheroes and fighter pilots would prove the magic bullets for struggling cinema operators, but as yet there is no end in sight for the sector’s misfortunes.