Emergency services were called to Monnou Street in Monmouth shortly after 9 p.m.
Dramatic paintings show thick clouds of smoke rising into the air as firefighters put out the fire.
Witnesses told Wales Online that the fire started in Peacock downtown.
One witness described the fire as “really, very bad”.
Photographs taken around 11 a.m. show the charred store after the fire subsided.
But by noon the smoke was still coming from the buildings.
Resident Richard Harry said: “I live at the very top of town and this morning at 9.30 came to pick up the paper and smelled that horrible smell in the air.
“I came to check on people and make sure everything was in order, and we were told to stay home altogether.
“It was very, very bad. Obviously there are a lot of clothes.
“They tell people to go home.”
A section of the main street has been blocked while firefighters are battling the blaze.
A spokeswoman for the South Wales Fire and Rescue Service said: “At around 9.20 on Monday we received reports of a fire on Mona Street in Monmouth.
“Crews from Manmouth, Aberborg and Kerfilly stations are currently present along with colleagues for emergency assistance. This incident is currently ongoing.”
A Gwent police spokeswoman said: “We received a report of a fire on Mona Street, Monmouth around 9.35am.
“Officers along with firefighters from the South Wales Fire and Rescue Service took part to help with traffic management.
“Currently the road is closed, the incident continues.”