According to Pete special ability he can buy common item for 2 trophies in the shop and transform it to unique item or even spell that costs 3-4 trophies, is it right? I think this work similar to Monterey, Bob and Dexter abilities, that works in the shop.
His ability just says "when you gain", so yes, it should work in the shop.
I agree with Orion that this doesn't make him fantastic. I think going to the shop is usually either a waste of time or a sign that you are already losing.