Translation:What do they sell in that strange shop?
Obchod is masculine inanimate, but the locative singular case has two possibilities: obchodu and obhodě. (See, for example: https://en.wiktionary.org/wiki/obchod.) Perhaps one of the Czech natives on the team can tell you when/why one may be used rather than the other, or if they are completely equivalent.
They are completely equivalent and different speakers prefer one or the other. Same goes for many other nouns, e.g. v autobusu / v autobuse.
The singular locative case of masculine inanimate nouns ending in a hard consonant (hrad paradigm) has two endings: -u and -ě(-e). Some words use -u, some use -e, and many can go with either.
Sometimes there are nuances in the meaning, e.g. "v českém jazyce" (in the Czech language), but "na jazyku" (on the tongue).
Use it where? :D
It's not possible to use it instead of "v" - it's only "v obchodě" or "v obchodu".
Very few nouns accept both "v" and "na", it's usually one or the other:
- v obchodě, v domě, v lese, ve městě, ve škole, v zemi (in the country/state), v posteli (in bed)
- na nádraží, na náměstí, na vesnici, na poli, na zemi (on the ground), na posteli (on the bed)