YANBU. A kid of that age is old enough to know what they are saying, and it's clear from the parent's response that they get this at home.
I'm sorry this happened to you, OP, and you were absolutely within your rights to tell this kid off, and to report it to the store.
It might even be worth reporting it (on the non-emergency line) to the police, as it was both racist and homophobic, and backed up by an adult even if committed by a kid. Even though they won't be able to do anything about this one particular incident, they should be compiling reports of how often this sort of thing happens in their patch.