Even McDonald’s CEO knows the fast-food giant is too expensive. Now he’s cutting prices to woo back cash-strapped consumers

Nino Paoli is a Dow Jones News Fund fellow at Fortune on the News desk.

McDonald’s has been struggling to hold on to its low-cost

The global fast food chain that built its customer base on affordability is slashing its combo meal prices. The move comes just weeks after CEO Chris Kempczinski admitted the menu has gotten too expensive. 

McDonald’s and its U.S. franchises reached an agreement to price eight popular combo meals at 15% less than the total cost of buying the items separately, The Wall Street Journal first reported, citing people involved in the discussions. The lower prices will go into effect next month. McDonald’s will also reintroduce its “Extra Value Meals” branding with a $5 breakfast deal and an $8 Big Mac and McNugget special later this year, according to the report. 

McDonald’s did not immediately respond to Fortune’s request for comment.

On a recent earnings call, Kempczinski said consumers’ value perceptions are most influenced

“Too often… you’re seeing combo meals priced over $10, and that absolutely is negatively shaping value perceptions,” Kempczinski said.

Kempczinski added the “single biggest driver” of what shapes a consumer’s overall perception of McDonald’s value is the menu board.

“We’ve got to get that fixed,” he said.

Over the past couple years, McDonald’s has been criticized online for its prices

McDonald’s decision to slash prices on core combo meals signals more than a marketing shift as the brand recognizes economic strains are affecting business. 

In May, Kempczinski said the company’s U.S. first quarter traffic this year from low-income consumers declined

Despite the company’s U.S. comparable sales falling 3.6% in the first quarter—its worst showing since the pandemic—winning strategies like themed meals, including a recent collaboration with “A Minecraft Movie,” have lifted sales in the second quarter after two consecutive quarters of decline.