Thirty domestic gas canisters against a wall outside the Supervalu supermarket in Market Square exploded as floames spread from a parked delivery van.
Flames reached more than 30 feet when fire units from Bundoran, Ballyshannon and Donegal town rushed to the scene.
Nobody was injured and fire crews got the blaze under control within minutes.
A spokesman for Supervalu said they managed to evacuate the store of staff and customers, about 25 in all, within about two minutes.
The alert was raised at 1. 25 p.m. when people smelled smoke from the burning van, attached to the store, before the gas canisters were threatened.
Michael Goodwin, Bundoran fire station officer, said an investigation was still ongoing into the cause of the blaze but it appeared to have been connected in some way to the van.
He said the blaze was outside but there was a little smoke damage caused inside as well.