Report: McDonald's Is Cutting Combo Meal Prices

McDonald's is planning to make its combo meals a bargain again. Insiders tell the Wall Street Journal that after extensive negotiations with franchisees, the cost of eight combo meals will be lowered to at least 15% below the cost of buying the items separately. Some combos that now typically sell for $10 will cost $8.50, and the chain also plans to offer $5 breakfast and $8 Big Mac and McNugget combos under changes coming in next month, according to company materials seen by the Journal.

The chain, fighting to preserve its image as a low-cost dining option after years of inflation, has agreed to subsidize franchisees who lose money on the discounts, the Journal's sources say. Earlier this month, McDonald's CEO Chris Kempczinski said perceptions of value were being shaped in a "negative way" when consumers saw combo meals priced at over $10, reports CNN. "The single biggest driver of what shapes a consumer's overall perception of McDonald's value is the menu board," Kempczinski told analysts in an Aug 6 earnings call. "And it's when they drive up to the restaurant and they see the menu board, that's what's shaping the that's the number one driver."