"The guy must have come through the side door and snuck into the bar," Mr Gregory said.
He had been standing at a table across from the bar with a few workmates and said there were about a dozen people in the bar at the time.
"We'd been there a couple of hours, but we didn't see a thing. No struggle nothing. We realised something was up when the cops came in and locked the bar down."
Mr Gregory felt for the barman who had worked at the hotel for many years.
"He wasn't hurt, but was pretty shaken up."
Part-owner Gina Tuckey declined to comment on the robbery.
The bar remained closed this morning as officers completed a forensic examination.
Detective Sergeant John Clayton confirmed a man armed with a weapon had gone through a door in a service area into the bar where he grabbed cash from the till and ran off. It is unclear wether he left the area on foot or by vehicle.
The robber was dressed in dark clothing.
Police were yet to tally the amount of cash stolen.
Officers considered calling a police dog and handler to track the robber but there were too many people around at the time and it had started to rain heavily.
Anyone with information that may help police should contact Whangarei station on 094304500.