Retail Accounting

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How does the forecourt market operate?

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Over the last 50 years several business models have emerged for the downstream retail sale of fuel by the major oil companies. There are a mixture of ownership and branding structures but in essence there are five categories:-

  • Dealer Owned Dealer Operated (DODO) – The forecourt is owned by an independent business, acting as a distributor for an oil company. The oil company supplies fuel and a branding package.
  • Company Owned Dealer Operated (CODO) – The forecourt is owned by an oil company who also provide the fuel however the operation of the site and convenience store is by an independent dealer under a franchise or similar agreement.
  • Company Owned Company Operated (COCO) – The forecourt is owned by an oil company and operated by a manager and staff employed directly by the oil company as with any other multiple outlet retail business.
  • Dealer Owned Company Operated (DOCO) – Similarly, the dealer may ask an oil company to run the operations of its assets.
  • Company Owned Group Operated (COGOP) – This is a variation on the CODO model, the main difference is that a group of sites is operated as a single business.

In addition to the above there are also independents trading under their own brand and buying fuel on the spot market from different suppliers depending on price. In many cases they may form small local networks of forecourt sites, typically 10 to 20.

Author: retailaccounting

CounterBooks is an online retail accounting management suite which is used by retailers across the world.

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