UPDATE 1-Brazil's GPA posts revenue gains, but food deflation weighs

(Adds details throughout on revenue numbers, adds context and analysis)

SAO PAULO, Jan 15 (Reuters) - Brazilian food retailer GPA SA said on Monday its fourth quarter net revenue rose 6.8 percent from last year to 12.5 billion reais ($3.91 billion) as a nascent consumer recovery boosted sales, although food deflation limited gains.

Revenue at GPA and archrival Carrefour Brasil has been rising in recent quarters, as Brazilian consumers show optimism at the tail end of a long economic downturn in the country, even as brick-and-mortar investment lags.

In 2017 overall, GPA, owned by French retailer Casino Guichard Perrachon SA, posted sales of 44.6 billion reais, up 8.2 percent from 2016.

The 6.8 percent rise in fourth-quarter net revenue is more modest than gains in previous quarters, influenced by low food prices following bumper harvests. The IPCA consumer price index for household food products fell 5.1 percent on the quarter from the same period a year ago, and the drop was especially pronounced with Christmas-related food products, GPA said.

Net sales at GPA stores open for at least 12 months, known as same-store sales, jumped 3.5 percent in the fourth quarter, a more modest increase than past quarters.

GPA's Assai format, a type of store offering a wholesale format to final customers which has grown increasingly popular in recent years in Brazil, grew 3.5 percent. Sales at GPA's more traditional Multivarejo formats fell 0.6 percent, after posting a modest gain last quarter. (Reporting by Gram Slattery and Tatiana Bautzer; Editing by Mark Potter and Chizu Nomiyama)