The shop owner is part of something you will need to unlock which forces you to kill him no matter the chat options picked as far as I can tell. You should talk to him and be sure to buy (and not sell anything you may need back in the future) before walking around much or you may kill him and will never be able to retrieve his goods. He only has a locket (gift) that really stands out which you can't get from any other store, but nothing as important as a tome for stat increases, talents, or skills.
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