Dunedin Police Senior Sergeant Craig Brown said the man entered the service station about 8pm, and allegedly threatened the attendant with a 40cm knife before running off with a "moderate amount" of cash and some tobacco.
No-one was injured in the incident, but the service-station attendant was shaken, he said.
Station owner Jonathan Usher was frustrated by the incident.
"An incident like this has a significant impact on the staff member concerned, and a significant impact on our business.
"We had to close while the police did their forensic investigations.
"All this was for minimal gain; just a couple of dollars and some tobacco. It was a complete waste of time."
Snr Sgt Brown described the man as a thin European male in his 20s, wearing a hooded top, trousers and dark sunglasses.
He was last seen running down Lawrence St.
Anyone with information about the incident should call the Dunedin Central Police Station, he said.
