Pub company Wolverhampton & Dudley (W&D) has said a rise in the National Minimum Wage and soaring energy costs will cost it £7m over the coming year.
With consumer spending slowing as well, W&D said it would battle to offset increasing costs through improved productivity and transferring smaller managed houses to tenancy.
In a trading statement, the company said business in the year to 1 October had met expectations and the integration of Burtonwood (January 2005) and Jennings (May 2005) was complete.
For the 51 weeks which ended 24 September, total like-for-like sales at the company's managed Pathfinder Pubs were 2.8% ahead of last year. Total like-for-like sales at the Union Pub Company, W&D's tenanted business, were also 2.8% ahead of last year.
Chief executive Ralph Findlay said: "Our focus on good quality freehold community pubs, high retail standards and popular beer brands places us in good position to benefit from changes that are taking place in the industry."
The company added that its offer for English County Inns had become unconditional on 15 September and the integration of the 14 managed pubs was underway.
By Chris Druce
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