Mitchells & Butlers (M&B) has announced the rise in the minimum wage to £4.50 an hour will cost the company £10m.
The 2,000-strong pub company said in a trading statement yesterday it would focus on increasing staff productivity to help relieve the pressure on profit margins.
The pressure, M&B said, would come from the minimum wage increase next month and a £7m rise in property rates, insurance and pension costs.
The trading statement showed continued improvement in like-for-like sales trends, driven by marketing activity and the good weather.
Like-for-like sales in pubs and restaurants that had received investment increased by two per cent during the 19 weeks since May 10.
But like-for-like sales in outlets that had not benefited from investment fell by 0.1 per cent.
M&B said this was an improvement on the trend it reported for the first 32 weeks of its current financial year.
Like-for-like sales in residential areas, which count for around 70 per cent of the company's pubs, were up by 3.3 per cent and by 1.2 per cent where there was no investment.
But at its high-street sites and in central London, like-for-like sales fell by 2.7 per cent.
M&B, the UK's biggest managed pub operator, said it was on track to return at least £400m of surplus funds to shareholders, through a securitisation deal that will begin next month.