Berrynarbor shop was officially opened in August.
The Berrynarbor Community Shop has been hailed as "one of the great success stories of North Devon" after it defied the odds to become a thriving hub in the village.
Now the shop has been short-listed for the 2008 Countryside Alliance Awards.
Villagers in Berrynarbor took over the running of the original village shop when it faced closure in 2004.
They were soon faced with the gargantuan task of fund raising and applying for grants to build a new, purpose-built facility in the village.
The cost of building the single-storey, larger shop and post office would be around £140,000.
North Devon Council came to the village's aid, leasing the land they needed for a peppercorn rent.
They also provided grant funding, along with Devon Renaissance and the Plunkett Foundation.
In November last year, the first sod was ceremonially cut by the oldest and youngest residents in the village.
A few months later the shop opened and residents held a celebration to mark the event in August.
Brian Holme, head of community and leisure services for North Devon Council, said: "Berrynarbor village, before the announcement of the Post Office closures for Devon, had to set up a Community Enterprise company to save their village shop and post office.
"All the volunteers have shares in this facility and provide volunteer time to help run it. Selling local produce, it is one of the success stories for rural country life."
Alex Parke, a member of the shop committee said: "We are delighted to be short-listed. Everything is going extremely well at the shop now and visitors often comment about how lovely it is."
Mr Parke said that profits for the year to October were up 24 per cent on last year.
The shop and post office includes a cafe area and is soon hoping to install an internet point
It is keen to promote local produce and as well as the usual provisions, stocks locally sourced meats, cheeses, fish, honey, jam.
There are 12 finalists in the South West region, competing for four titles.
Berrynarbor is competing for the title of Best Village Shop/Post Office.
The winners will be announced in early 2009.