Manjinder Sandhu was in the adjoining residential flat of the Sai Food Market in Prince Albert Rd, St Kilda, when she heard someone enter the dairy about 7.15pm.
When Ms Sandhu entered the shop she found a woman wearing a balaclava and allegedly carrying a knife.
"As soon as I saw her pointing the knife, I ran straight back to the house."
The alleged offender attempted to access the till, but was unsuccessful and left empty-handed.
The incident followed another armed robbery in the street on Wednesday in which a woman allegedly stole a small amount of cash at knife-point from takeaway restaurant Tandooree Garden.
Police last night arrested a 28-year-old woman and charged her in relation to the two robberies.
She is due to appear in the Dunedin District Court today.Ms Sandhu said she had bought the dairy only three weeks earlier and the ordeal had left her shaken and questioning the intentions of everyone who entered the dairy.
"I was so scared my legs were shaking and even today when someone comes in to buy anything I wonder if I can trust them."
"At the moment I just want to forget this."
The previous owner ran the dairy for a year and was never robbed, she said.
However, the store was targeted twice in 2012 and once in 2013.
Earlier, Detective Sergeant Robert Hanna said business owners should remain vigilant and report any incidents of concern to police.
"We would advise anyone who finds themselves in a similar situation to comply with the offender’s demands and not get into a physical confrontation in any way," he said.
"The risks just aren’t worth it."
Victim Support had also been in contact with Ms Sandhu.
"At the moment I think I’m fine. It will just take me a little time to trust people again," Ms Sandhu said.
