パン屋{や}でパンを買{か}います。
Not sure what ゃ で means here. Noun, ゃ で, noun.
From the edit history, the source seems to be this image.

The furigana seems quite small, so this might explain why you thought it should have been written as
パンゃで
However,
are not the same thing. It should actually be 1.2, やで, with a regular sized や. 1.1, with the small や, by itself suggests that there should have been a youon before で. For example (not pertaining to the given image)
That is why the title might be considered misleading. With the regular sized や, it is expected that
やで could make sense.
In the given image, ~や (~屋, regular や)is a suffix that means shop. So bread shop → bakery. In this case, で marks the location where an action takes place. So the given image reads, more or less, I buy bread at the bakery. Two more examples
パン屋{や} is one word and means bakery. パン屋{や}で means "at the bakery".