Green Island Post and Paper shop owner Peter Ryder said a female teller was "extremely shaken" yesterday after a man wearing a black hoodie and dark glasses entered the NZ Post and Kiwibank outlet, and demanded cash.
Mr Ryder said the teller was shaken but holding up well and would be offered counselling.
He, wife Wendy and their staff spent yesterday dealing with police.
The shop would be back to normal "as best we can" today.
Police said the man walked into the shop in Green Island's main street just after 11am, handed over a bag and a note demanding the teller put money in the bag.
He implied he had a gun, although no gun was seen or shown.
An unknown amount of cash was placed in the bag and the man left the shop.
Mr Ryder said he had never experienced a robbery before, and it had been a frightening experience for all.
About 20 customers were in the post shop and a coffee shop in the same premises, although most people had not noticed the robbery taking place, he said.
A woman who had tried to go into the shop immediately after the robbery told the Otago Daily Times it was "horrifying" this sort of thing could happen in "little old Green Island".
Detective Sergeant Rob Hanna, of Dunedin, said video footage from the shop showed the man was Caucasian, 170cm to 180cm tall, of slim build, and wearing a dark hoodie, dark sunglasses and jeans.
Several witnesses described seeing a red or similar colour car being driven in the area in a suspicious manner. However, it was not known if the vehicle was connected to the robbery.
The BP service station in Mornington was robbed about 8pm on Sunday by a man wielding a knife.
Det Sgt Hanna said although there was nothing to suggest the robberies were linked, "the descriptions of the offender in both incidents are similar and police cannot rule out the possibility that the same person is responsible for both crimes".
Many people were in the area at the time of yesterday's robbery and anyone who saw anything suspicious or had information should contact police, he said.
Anyone who could assist with either investigation should contact Dunedin police on 471-4800 or provide information anonymously on Crime Stoppers line on 0800 555 111.
