Can you not refer to ReplicatedStorage or ServerStorage from a LocalScript?

ReplicatedStorage does work in LocalScripts, as the contents are replicated in the client and server.

local repStorage = game.ReplicatedStorage:findFirstChild("WhateverName")

I've used it in my games.

However, ServerStorage cannot be accessed with LocalScripts, since it is only accessible by server. See here for more about that.

Using ServerStorage should work from a LocalScript, I have used it in LocalScripts. Was the error that you were referring to ServerStorage, or something else?

I still get the error (see OP) when I try to index Replicated Storage.

Here's my code:

for s in shopitems.Value:gmatch("%P+") do
    if inventory.Value:gmatch(s) then -- errors
        game.ReplicatedStorage(s):clone().Parent = player.Backpack
    end
end

If it actually makes it to line 3, change the parenthesis to brackets on game.Replicatedstorage, and capitalize Clone:

game.ReplicatedStorage[s]:Clone().Parent = player.Backpack