In California this Holiday Season, Cash Is Still King

Six in 10 Californians (59 percent) say they will use cash to pay for holiday purchases this year, providing further evidence of a new normal in consumer behavior, according to the latest Citi California Pulse™.

And despite some signs of economic recovery, most Californians are planning to cut back on their spending and travel this holiday season. According to the survey, nearly half of all respondents (48 percent) plan to spend less this year than they did last year, while 40 percent plan to spend about the same and only 11 percent plan to spend more. In fact, 52 percent of Californians believe that their holiday spending will be forever changed as a result of the recession.

“While the holiday spirit is as strong as ever in California, the economic challenges of the last two years have had a significant impact on consumer spending behavior,” said Rebecca Macieira-Kaufmann, President of Citibank California. “Californians are spending less, staying close to home, and making resolutions to improve their financial situations this holiday season.”

Among the survey’s other key findings:


  • 56 percent say there is too much emphasis on gift giving during the holiday season

  • 44 percent say they will only purchase items on sale

  • 63 percent say they will shop in stores vs. 17 percent who will shop online

  • 54 percent plan to spend less than $500 on holiday shopping this year

  • 38 percent said they would eat out less compared to past holidays

  • 54 percent don’t see any signs that the economy is improving


Quarterly Optimism Index Declines Slightly

Overall, the Citi California Pulse index of optimism fell slightly in the fourth quarter compared to the third quarter, declining from -1 in September to -4 in December. While the majority of Californians still believe things will improve over the next 12 months, the positive outlook fell in most categories, including future economic conditions, job opportunities and personal financial conditions.

Regional Results: Northern Californians More Optimistic, Likely to Spend More this Holiday

The survey also found surprising differences between residents of Southern California and Northern California. Los Angeles area-residents say they are more likely to spend less this holiday season (54 percent) than those in the San Francisco area (44 percent). In addition, 47 percent in the Los Angeles area say they will only buy items on sale this season, compared to just 34 percent in the San Francisco area.

These results track closely to the personal financial situations and outlooks on economic conditions in each region. For instance, 65 percent in the San Francisco area believe the state economy will be better in 12 months, while just 52 percent in the Los Angeles area see better times ahead. Similarly:


  • 60 percent of Bay Area residents feel job opportunities in California over the next year will be much or somewhat better, compared to 50 percent of Los Angeles-area residents

  • 23 percent in the Bay Area believe their personal financial situation is much or somewhat better compared to a year ago, vs. just 12 percent in the Los Angeles area

  • 52 percent of Bay Area residents are very or somewhat comfortable with their current level of savings, compared to 41 percent of Los Angeles-area residents


Most Californians Resolve to Improve Their Financial Health in the New Year

Across the state, many respondents indicated they have made New Year’s resolutions this year to address their financial health. For example:


  • 60 percent say they will take a more active role in their finances

  • 59 percent say they will cut back on everyday expenses

  • 52 percent plan to significantly improve their financial situation

  • 52 percent plan to save and invest more


“For the second quarter in a row, the Citi California Pulse has revealed broad, potentially permanent changes in spending and saving,” said Macieira-Kaufmann. “And while most Californians remain optimistic about the future, the challenging environment is clearly impacting the behavior and outlook of most state residents.”

Macieira-Kaufmann added that some of the most interesting results of the survey came from Californians’ wishes for the New Year. More than half (57 percent) wished for health and happiness in 2010. Among other hopes for 2010, 11 percent wished for economic improvement, 16 percent for better employment opportunities, and 20 percent for improvement in their finances.

About the survey

The Citi California Pulse™ is a quarterly survey focused on California consumer and small business sentiment regarding the current and future economic environment. This poll was conducted by telephone November 27 – December 3, 2009, among a random sample of 1,206 California residents, age 18 and older throughout the state. Interviews were conducted in both English and Spanish. The design includes interviews with cell phone respondents, 325 interviews in the San Francisco MSA, and 340 interviews in the Los Angeles MSA. The cell phone and MSA samples are weighted to the correct proportions. The margin of error for the entire sample is approximately +/- 3 percentage points. The margin of error is higher for subgroups. Abt SRBI Public Affairs, a major national polling firm conducted all interviewing. For additional information, visit:

Index Methodology

The California Pulse™ Index is calculated by subtracting negative responses to each item from the positive responses for all 12 index items. The Index scale can range from +100 (if every respondent gave positive response to each of the 12 questions) to -100 (if all respondents expressed consistently negative views).

About Citi:

Citi, the leading global financial services company, has approximately 200 million customer accounts and does business in more than 140 countries. Through Citicorp and Citi Holdings, Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management. Additional information may be found at or