Booklore bookshop in Sherborne is closing after 35 years.
Its owner, Gill Capel, is retiring after running the shop for 21 years. Capel said she took the decision to close Booklore after failing to find a buyer for the freehold business.
Capel said: "I did try to sell it, but this is not a good time economically to sell a freehold shop at the moment."
The bookseller said she had "loved every minute of the shop," and added "It is the best thing I have done in my life, but it is time to retire."
The closure comes at the same time the Local Data Company has said the number of empty shops on UK high streets is set to rise in 2012 because of weak consumer confidence, rising unemployment and growing online sales.
It said that while UK vacancy rates stayed stable in 2011 at 14.3%, there were big regional differences, with Stockport having a vacancy rate of over 30% while St Albans had the lowest with 8.2%.