The masked robber entered the Elgin Rd Food Market, Mornington, just after 6pm, presenting a knife at the young shop assistant.
Police were keeping an open mind as to the sex of the offender, who they described as either an effeminate man or a female, aged about 19, with short blonde hair, Detective Dave Checketts said.
The scarf used to shield the person's face slipped down during the robbery and the assistant was able to provide a description of the offender.
The person had distinctive piercings, including a stud on their bottom lip, in their nose, and several rings on their left ear.
They are believed to be a former customer of the store and there was a "reasonable chance they lived in the area", Det Checketts said.
The person left the scene on foot and a police dog followed a track to a black and purple top and dark grey jumper in Scoular St, and a black hoodie, grey pants and red gloves discarded in Oakwood Ave.
The black-handled knife, which had a 20cm blade, was later found dumped in a rubbish bin, Det Checketts said.
Witnesses had already come forward, but anyone who might have seen the person running and discarding their clothes at the time of the incident was urged to contact police.
The shop assistant was still shocked by the incident and Victim Support was assisting her.
Senior Sergeant Bruce Ross said the incident was the second in three days involving the armed robbery of a dairy, and served as a reminder for shop owners to review their security.
On Sunday night, a Halfway Bush dairy was robbed by a masked man demanding Kronic, a legal high.
Any dairy owners wanting guidance could contact their local constable, he said.
• Anyone with information about the Elgin Rd armed robbery can contact Dunedin Police on 471 4800.
