* Capex 'just over 1 bln reais' may be lowest since 2009
* May shutter more Via Varejo stores early next year
* Ugly economy could spur M&A (Adds executive comments, details of investment plan)
By Brad Haynes
SAO PAULO, Dec 9 (Reuters) - GPA SA , Brazil's biggest retailer, plans to slash investments in 2016 to what may be the lowest level in seven years and could close more stores as the deepest economic recession in 25 years threatens to worsen in coming months.
Chief Executive Ronaldo Iabrudi told journalists on Wednesday that capital spending next year would fall to "a little more than 1 billion reais ($269 million)," down sharply from a projected 1.7 billion reais in 2015.
GPA's strategy confirms the fears of many economists that investments in Latin America's largest economy would tumble further next year as rising unemployment, accelerating inflation and a worsening political crisis batter business confidence.
The retailing giant's investments jumped from about 700 million reais in 2009 to around 1.2 billion reais in 2010-2012 and peaked near 1.9 billion reais in 2013 and 2014.
"The economy is bad and next year looks worse," Iabrudi said. "We're basing plans on the worst case scenario."
Chief Financial Officer Christophe Jose Hidalgo added that GPA would be pragmatic about capital spending and could invest more or less depending on the economic outlook and profitability of different parts of the business.
The focus of capital spending will be about a dozen new Assai cash-and-carry wholesale stores, along with many more convenience stores and about 15 reformations of older Extra hypermarkets, Iabrudi said.
Via Varejo SA, GPA's struggling appliance and home furnishings division, was conspicuously absent from the investment outlook. Iabrudi said the group may decide to close more stores in the division early next year.
Via Varejo already shuttered a net 21 stores in the first nine months of 2015. GPA's workforce shrank about 11 percent in that period, from an all-time high of 160,000 in January, when it boasted one of Brazil's biggest private-sector payrolls.
Weak demand will weigh on same-store sales growth next year, Iabrudi said, while administrative efficiency should offset downward pressure on gross profit margins in several formats.
Iabrudi said the greatest chances for significant growth would come from potential acquisitions, adding that the company was protecting its cash to take advantage of opportunities presented by struggling rivals.
"In Brazil, the biggest growth comes during the crisis," he said. "In food retail, we think there are several regional chains that are facing trouble ahead ... Our mergers and acquisitions team is looking at who wants to make a deal."
$1 = 3.72 Brazilian reais Reporting by Brad Haynes,; writing by Caroline Stauffer; editing by Jeffrey Benkoe and Grant McCool