The incident started when police got a call about a suspicious person inside the store at West Colfax Avenue and Perry Street shortly before 9 a.m.
He took a female hostage, and there were employees and customers inside the store during the incident, said Denver Police Chief Robert White.
Police negotiated with the man for about an hour before he came out with a female hostage.
The man used the woman as a shield, while police yelled at him to surrender.
"He then attempted to drag the female back in the store. Out of fear for the female's safety, one of the officers fired one shot, striking the individual," White said.
The suspect was apparently hit in the torso, and he was listed in critical condition at Denver Health Medical Center.
The hostage was not harmed. Later in the afternoon the woman, who did not to give us her name, said she was glad she survived the incident unharmed.
"It was terrifying. It was stressful and I don't wish it on my enemy," she said. "Everybody that's concerned about me, I appreciate your thoughts and prayers."
She said police did a "great job," of handling the situation.
White said the man "indicated that he had a weapon," but police did not confirm that.
A FOX31 Denver photographer was positioned across the street from the scene and recorded the shooting. In the video, the man can be seen standing behind the woman. He wore a grey hoodie and didn't appear to say anything.
White said he was pleased that the situation ended without any officers or victims being hurt.
Cowell Elementary School, Lake International School, Strive Prep at the Lake Campus, Cheltenham Elementary and Colfax Elementary were all placed on a modified lockdown, Denver Public Schools said. The lockdown was lifted at 9:30 a.m.
Colfax was closed from Newton Street to west of Perry, and between 14th and 16th avenues, DPD said.