One in seven German shops fear collapse as households in Europe's largest economy slam the brakes on spending.
The share of companies in Germany's retail sector which are concerned they will be forced to close surged from 10.3pc last year to 13.8pc in October, the largest proportion of any sector, according to a survey by the Institute for Economic Research (Ifo).
It is the latest warning sign for the Germany economy which is grappling with anaemic growth and massive political turbulence following Chancellor Olaf Scholz's decision to sack his finance minister and the subsequent collapse of the government coalition last week.
The government faces a confidence vote on Dec 16 which Mr Scholz is expected to lose, triggering an election in February.
The share of German companies that "fear acutely for their economic survival" jumped from 6.8pc last year to 7.3pc in October as cashflow dries up amid a slump in orders, according to the Ifo.
The research institute said that households' "ongoing reluctance to spend" was hitting sales, just as companies are grappling with higher staff costs, steeper energy bills and growing international competition.
Klaus Wohlrabe, head of surveys at Ifo, said: "The steady increase in corporate insolvencies is likely to continue.
"In addition to the lack of orders, growing international competitive pressure is upsetting many companies so much that they see their future acutely at risk. Growing bureaucratic requirements are adding to the cost pressure."
It comes amid mounting concerns over the German economy, which has been hammered by a manufacturing recession, a construction crisis and low demand from China, its biggest trading partner.
The share of firms reporting serious economic problems in the manufacturing sector jumped from 6.4pc last October to 8.6pc this year.
Ifo figures earlier this month showed German car sales plunged at the fastest pace since the Covid lockdown.
Separate figures from Germany's Centre for European Economic Research (ZEW) earlier this week also showed a significant drop in business confidence following the US election result.
The ZEW economic sentiment index dropped from 13.1 to 7.4 in November, a fraction of the peak of 47.5 recorded in June, as fears mounted over imminent and aggressive American trade tariffs.
Donald Trump campaigned with a central pledge to introduce blanket tariffs of 10pc to 20pc on all goods imports to the US, as well as tariffs of up to 60pc on China. Economists have warned this would hammer global trade and drive up inflation.