Neil Leaman, who owns Uniques of Newton in Newton Abbott, Devon, has removed the 3ft statue from his stock. It depicts a black man with dreadlocks holding a menu board.
One customer, Jake Dabner, said it had no place in society. He claims it represents "a thing of the past," Cornwall Live reports.
Jake, originally from London, said: "I was driving through Newton Abbot when I saw the figure outside Uniques of Newton.
"I was really shocked and angry to see it on display outside the store.
"It is a really bad caricature of a black man in my opinion. The size of the lips are exaggerated and this is why I regard it as racist.
"This sort of imagery has rightly been removed from packaging and advertising and the practice of blacking up is now thankfully mostly a thing of the past.
"Unfortunately, there is an element of Devon that hasn't really caught up with the rest of us in this respect.
"You wouldn't find a figure like this in a more multi-cultural area. I am from London and it really stuck out to me."
Neil said he "just wants things to go smoothly".
The businessman said: "I've got a very nice little shop which we only open three days a week.
"I took it down because I'm semi-retired and I just want things to go smoothly.
"We've had nothing but fantastic reports on emails. A black family with black relations - they absolutely couldn't believe the complaint.
"Where do you stop? it's just a menu board. Go to Bournemouth - there's a Rasta restaurant that serves Rasta food.
"There's shop in Plymouth also selling the same boards from the same supplier."