Jalial Whitted, 37, is shown in surveillance video pulling out a firearm inside the Dollar General, acting Atlantic County Prosecutor Cary Shill said.
Employees fled, leaving Whitted inside, Shill said. He then discharged at least one round inside the store.
Police were called to the store in the 700 block of New Road at 9:35 a.m. Holy Spirit High School, which is about a block from the scene, was put on lockdown as a precaution.
Whitted was ordered out of the store, which he exited, according to the report. But, once outside, he refused officers' commands and reached for the weapon in his front pocket.
He was shot at about 9:40 a.m., Shill said. It was not indicated whether it was one officer or more who fired.
A loaded firearm was recovered from Whitted, according to the report.
He was given medical care at the scene and then taken to AtlantiCare Regional Medical Center's City Campus in Atlantic City, where he remains in stable condition.
Whitted is charged with unlawful possession of a weapon, possession of a weapon for an unlawful purpose and possession by a certain person not to have a weapon.
Whitted, who reportedly suffers from a pre-existing psychiatric condition, has a history of issues with police.
That settlement stemmed from a Dec. 6, 2013 incident at Whitted's home, in which he claimed Whitted was already on the ground and handcuffed when a K-9 dog was ordered to attack him and five other officers beat him, Paff reported.
Whitted's most recent conviction stemmed from a 2018 incident charging him with disarming a law enforcement officer and aggravated assault on an officer.
He pleaded guilty in 2019 to the lesser charge of eluding and threatening law enforcement, court records show.