Tommy Brown, now 18, pleaded guilty to the aggravated robbery charge later than Nathan, and was sentenced this week in the court.
Judge McDonald imposed nine months of home detention with six months of post-detention conditions, but said he only did so due to Brown's young age.
Had Brown been older, he would have been jailed, the judge said.
Brown also avoided a three-strike warning, which can only be imposed on offenders aged 18 or older.
It was accepted Brown was "roped into" doing the robbery by his older brother, Judge McDonald said.
The two brothers walked to the dairy, Tommy with a flick knife, Nathan with a machete.
Three shopkeepers were in the store - two behind the counter, another stocking shelves. The brothers used their weapons to intimidate the group. Tommy went behind the counter and demanded money while Nathan stood in front of it.
The shopkeepers managed to flee to a storeroom, which they locked themselves inside and from which they activated fog cannons. The brothers continued grabbing tobacco regardless.
Evidence against Tommy included items found when police searched his house - a knife and clothing similar to those used in the robbery, and seven pouches of tobacco.
Aggravating features of the offending were the planning and premeditation involved, albeit low; the use of disguises – limited to black clothing and hoodies; and the potential for serious harm, the judge said.
It was lucky the shopkeepers had run away rather than confront the pair, as "who knows what would have happened" had they done so, the judge said.
There were no customers in the shop at the time, but there was always the possibility someone might have come in.
The effect on the victims was "horrendous" - they were fearful every time someone entered the store. They look at them and wonder if they are going to be robbed.
"I'm sure you wouldn't like to live like they, they certainly don't and they shouldn't. And for what - $1000 worth of cigarettes?
"If you'd been much older - because the start point was four years, 10 months - you'd be heading to jail, sitting in a cell in prison for years and years wondering 'how did I get here?'," Judge McDonald told Brown.
Cultural, presentence, and mental health reports before the court showed difficulties Brown endured growing up, and more recently when he spent time in a mental health unit.
"There is nothing to be gained by sending such a young man with these difficulties to prison - he would come out a hardened criminal, not rehabilitated," Judge McDonald said.
He noted Brown's mental health was currently stable; he was back home, doing well, and working.
The sentence starting point was four years, 10 months.
The judge applied discounts of 20 per cent for Brown's youth, 15 per cent for his belated guilty plea, 5 per cent for remorse, and 10 per cent for matters raised in his cultural report.
Brown's upbringing was "appalling", the judge said.
Removed from their negligent parents by the then-Child, Youth and Family Services (now Oranga Tamariki), Brown and his brother were placed with an aunt, where they suffered even worse mistreatment, including violence and abuse.
Their education suffered. Brown stopped going to school when he was 13, after being expelled from a third school, the judge said.
Notwithstanding that, he was sure Brown as he told a report writer, knew the difference between right and wrong and that this offending was wrong.
Reparation was not ordered – Brown had no means to pay, the judge said.
An order was made for the destruction of the knife.
Aggravated robbery is included in a group of serious charges, for which alleged offenders aged 17 are transferred to the district court. Automatic suppression, which applies to offenders of the same age in the Youth Court, does not apply.
