From 1 February warehouse workers will receive a minimum rate of £13.18 ($16.28) an hour, up from £11.48 last January.
Many UK employers are offering higher pay deals in the face of a still tight labour market and the escalating cost of living.
Inflation in Britain is running at 10.5% and the Bank of England is watching pay settlements closely as it mulls further rises in interest rates.
Investment In Wages
From this month it is paying store staff a minimum of £11 an hour outside of London and a minimum of £12.45 in the capital.
Earlier this month Sainsbury's announced another pay rise for its store staff, while Tesco is in talks with workers and unions on its pay review.
Elsewhere, British inflation eased last month after hitting a 41-year high in October, offering some comfort to the Bank of England, but the pressure on households remained intense as food and drink prices rose at the fastest pace since 1977.
Annual consumer price inflation fell to 10.5% in December from November's 10.7%, the Office for National Statistics said on Wednesday, a drop in line with economists' forecasts in a Reuters poll.