Eve Watson, 55, and her six-year-old Staffordshire Bull Terrier, Cane, took on the intruder after he jumped over the counter with a Stanley knife demanding money from the till.
The shop owner fought back by grabbing a nearby craft knife, telling the robber, "so you like to play with knives, do you".
Mrs Watson then grappled with the robber and managed to pull down his hood, exposing his face to the CCTV cameras in the shop.
Her dog then joined in, biting the man between his legs before the intruder fled the shop empty-handed.
Mrs Watson, who lives above the Bargain Booze shop in Torquay, Devon, with her husband, said: "There was no way I was giving in without a fight.
”I’ve worked hard for that money so why should I just give it up because some coward walks in with a knife?
”It was instinct really but I’ve always said that if anyone were to break in I wouldn’t meekly give them money.”
Devon and Cornwall police praised Mrs Watson for her bravery and have now launched an appeal to find the culprit.
