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UPDATE 1-Shares in Brazil's GPA fall as lower food prices hit revenue

(Adds details on results, share price)

SAO PAULO, Oct 16 (Reuters) - Shares in Brazilian retailer GPA fell to a two-week low on Monday as a bigger-than-expected drop in food prices weighed on the Brazilian food retailer's quarterly revenue.

GPA reported net revenue of 10.9 billion reais ($3.4 billion) in the third quarter, an 8.1 percent increase from a year ago. Growing market share and the conversion of former hypermarkets boosted net revenue at the company's Assai cash-and-carry stores by 25.2 percent.

Sales at Assai stores open for at least 12 months, known as same-store sales, grew 7.7 percent, while same-store sales in the retailer's more traditional formats rose 0.6 percent, led by a recovering volumes in the group's flagship Pão de Açucar supermarkets.

Still, weak food prices caused the retailer to miss some analysts' targets, dragging shares in GPA, owned by France's Casino Guichard Perrachon SA, nearly 1 percent lower on Monday to their lowest levels since Oct. 3.

Analysts at UBS said consolidated same-store sales growth of 2.4 percent was below their estimate of 4.1 percent growth, adding that "food division results were slightly weaker than expected due to stronger-than-expected negative results from food deflation."

Food prices fell by about 4.5 percent on the quarter, according to government statistics agency IBGE.

($1 = 3.17 reais) (Reporting by Gram Slattery; Additional reporting by Jake Spring; Editing by Brad Haynes and Chizu Nomiyama)