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UPDATE 2-Shares in Brazil's GPA rise on revenue gains

(Adds market reaction, adds operational details)

SAO PAULO, Jan 15 (Reuters) - Shares in Brazilian food retailer GPA SA rose well over 1 percent on Monday morning after the company posted gains in fourth quarter revenue, as a nascent recovery in consumption boosted sales.

The company said on Monday its fourth quarter net revenue rose 6.8 percent from last year to 12.5 billion reais ($3.91 billion) with a strong performance at its Assai wholesale format, 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.

Nevertheless, the market reacted positively to GPA's fourth quarter revenue, and shares in GPA had jumped 1.58 percent to 76.06 reais in morning trading.

Net sales at GPA stores open for at least 12 months, known as same-store sales, jumped 3.5 percent in the fourth quarter.

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 10.7 percent. Sales at GPA's more traditional Multivarejo formats fell 0.6 percent, after posting a modest gain last quarter.

The company said that among its Multivarejo formats, GPA's flagship Pao de Acucar stores posted volume gains for the second straight quarter, indicating that consumers are increasingly willing to shop at the format, even as it is slightly more expensive that Assai. (Reporting by Gram Slattery and Tatiana Bautzer; Editing by Mark Potter and Chizu Nomiyama)