The incident took place at 2:15 p.m. Labor Day at the Family Dollar store located on the 300 block of East Allegheny Avenue.
Police say an employee noticed the suspect placing items inside his pants. The suspect was confronted and the items were retrieved.
The employee photographed the suspect and escorted him from the store.
As the suspect was being escorted, police say he pulled a knife and verbally threatened to stab the employee.
The suspect then fled east on Allegheny Avenue.
He is described as a Hispanic male, 180 pounds, with a thin build. He was wearing a red hoodie with an Elmo picture on the front.
Anyone with information is asked to contact Philadelphia Police at 215-686-TIPS (8477), text a tip to PPD TIP (773847) or through PhillyPolice.com.