Robertshaw's in the village of Thornton won the north regional section of the Rural Retail Business of the Year category and will now go through to the national finals of the Amazon-sponsored competition in February.
The shop is based on a working sheep farm in Bronte Country, with three generations of the Robertshaw family working in the business - and a fourth training as an apprentice butcher.
The business supports 450 local suppliers, growers and farmers, has its own wind turbines to power the building and operates a strict no-waste recycling policy.
Owner James Robertshaw said: "We are beyond excited to announce we have won the Best Rural Retail Business in the whole of the north at the Rural Business Awards.
"A massive thank you to all our hard working, dedicated team, our wonderful customers and suppliers for your continued support. We couldn’t have done it without you."
Winners in 13 categories are decided by an independent judging panel.
The business was praised for sourcing its food locally, with James visiting auction marts three times a week to buy meat from butchers.
Samples are widely availabe in the shop and suppliers are invited in for regular 'meet the customer' events. There is a 'full weekly shop' ethos which enables customers to buy eggs, fresh vegetables and flour as well as meat.
The family also run a petting farm and educational events for children to learn about the food chain.
The business was previously known as Keelham Farm Shop when it was run jointly by James and his sister Victoria following their father Andrew's death. Their grandfather, Harry, opened a butcher's shop in Halifax in 1929. Andrew started the farm shop - then a novel concept - in the 1970s.Victoria left the family farm to study at Durham University and work in corporate roles in London, so when she returned to Thornton she took on aspects such as marketing and accounting.
They branched out to open a second site in Skipton in 2015, but the siblings later separated their business interests, with Victoria becoming chief executive of the Keelham brand, which she hopes to expand with further outlets, and James retaining sole ownership of the original shop, which reverted to the Robertshaw's name.