Southland Area Commander, Inspector Lane Todd, said police wished to thank the wider community for assistance and support in resolving this incident.
The suburb of Otatara was locked down for several hours after a person dressed in black and wearing a devil mask held up a dairy at gunpoint.
Invercargill police were called to Four Square Otatara at 1.42pm after the robbery, which left a shop assistant shaken but unhurt.
CCTV footage shows the man walking into the store wearing a halloween mask and then pointing a rifle at the shop assistant before leaving on foot with a bag of cash.
Southland area commander Inspector Lane Todd said police were hunting for a man, believed to be Caucasian.
Parts of the suburb were locked down for several hours, with the armed offenders squad deployed to clear the area while a helicopter searched from the air.
Four Square Otatara's owner said he could not comment on the details of the event, but store staff were ''fine''.
Otatara Primary School was locked down after the incident.
Board of trustees chairman Warren Ruwhiu said the school's 320 pupils were unharmed, although some were upset.
''We are going to have some kids who are scared but it's a good community here, where they rally around the kids,'' he said.
Parents were able to pick up their children - who were assembled in the school's hall for safety - one at a time and all pupils were on their way home by about 4.15pm, he said.
The tight-knit community was in disbelief, he said.
''It's a fairly small community; things like this shouldn't happen here, or anywhere else for that matter,'' Mr Ruwhiu said.
''I'm a bit shocked myself, really.''
A planned halloween party at the school was postponed as a result of the robbery.
Otatara Preschool owner Petrina Hickey, whose child attends Otatara School, said a sole police officer stood guard at the preschool during the afternoon.
Her daughter was a ''little bit upset'' by the events, she said.
''It was a bit of a frightening experience for the children. Everyone's very shocked and concerned about the people at the Four Square. It's nothing you expect to happen here.''
Despite the robbery, the community's residents felt the suburb was safe, she said.
''We do feel really safe here,'' Ms Hickey said.
''We have got good support from the New Zealand Police. They have done a great job of making everyone feel really safe in the community.''
Insp Todd said police inquiries into the armed robbery were ongoing.
It was possible the person had left the area.
However, police asked residents to report suspicious activity immediately and anyone acting suspiciously should not be approached, he said.
''We appreciate that this afternoon's events have caused some disruption to the community and we thank members of the public for their patience,'' Insp Todd said.
Anyone with any information about the incident should call Detective Sergeant Grant Johnstone on 021 191-5159.
