Dining on a Budget in Reykjavik

Iceland is expensive, and restaurant prices in Reykjavik have climbed a long way since I first wrote this page. You can still eat well without wrecking your budget, though. The trick is to cook some meals, eat your big meal at lunch, and know the handful of places where a local specialty doesn't cost a fortune. For the bigger picture, see How to Budget for a Trip to Iceland.

Shop where Icelanders shop

If your room has a kitchen, the supermarket will save you more money than anything else on this page. The two discount chains are Bónus and Krónan. Many Krónan stores are open every day from 8:00 to 21:00, and Bónus lists its store hours on its site.

What to buy:

• Skyr, the thick, high-protein dairy product that works for breakfast, lunch or a snack.
• Rye bread, cheese, eggs and smoked fish for sandwiches you can carry on a day trip.
• Ready-made soups, salads and sandwiches when you don't feel like cooking.

Our guide to self-catering in Iceland has more on stocking a kitchen.

Hot dogs

Icelandic hot dogs are the classic Reykjavik cheap eat. Forget the American ballpark frank: these are made mostly from lamb, with pork and beef, and come topped with fried and raw onions, ketchup, sweet mustard and remoulade. Ask for "eina með öllu" (one with everything).

They aren't the bargain they used to be. When I wrote this, a hot dog at Bæjarins beztu pylsur by the harbor cost around 250 kronur. As of March 2026 it's 880 ISK, or 1,330 ISK with a soft drink. That's still the cheapest hot meal in town, and I still say order two.

Bakeries for breakfast

A pastry and coffee at a bakery costs a fraction of a hotel breakfast. Sandholt, at Laugavegur 36, is open daily from 7:30 to 18:00. Brauð & Co. opens at 6:30 at Frakkastígur 16, early enough for tour pickups. More ideas are in Cafes in Reykjavik.

Food halls

A food hall lets a group eat from different kitchens and split one table. Grandi Mathöll, at Grandagarður 16 in the old harbor area, is open daily from 11:00 to 21:00, with seating and takeaway. Most of its kitchens are owned by women, and several of the owners moved to Iceland from abroad. You'll find Nepali food cooked with Icelandic lamb at Fjárhúsið, Indonesian dishes at Eldhús Iru, and more at Kore, The Gastro Truck and Pastagerðin. It's a short walk from the downtown harbor.

At the other end of Laugavegur, Hlemmur Mathöll fills the old Hlemmur bus station at Laugavegur 107 with eight food stalls, including Flatey Pizza, Vietnamese food at Halló Xin Chào and Icelandic lamb at Fjárhúsið. The hall is open every day from 11:00 to 23:00, though most stalls close earlier.

Traditional food without the splurge

You don't need a tasting menu to try Icelandic food. Kaffi Loki, across from Hallgrímskirkja, serves open-faced rye bread with plokkfiskur, or flatbread with smoked lamb, for 2,800 ISK each, and a bowl of Icelandic meat soup for 4,850 ISK (menu as of 2026). For the adventurous, a taste of fermented shark with a shot of brennivín is 2,900 ISK. More on those foods in Icelandic Delicacies.

Tapas Barinn: good, but no longer cheap

I used to send budget travelers to Tapas Barinn at Vesturgata 3b to try Icelandic specialties in small portions. It's still open, but the plates on its current menu mostly run 3,590 to 4,890 ISK each, so a table of two will spend real money. Smoked puffin with brennivín-blueberry sauce is 4,490 ISK. Go for a treat, not to save. It opens at 17:00, and the kitchen stays open until midnight on Fridays and Saturdays.

More ways to save

• Eat out at lunch. Many restaurants have a cheaper lunch menu. Þrír Frakkar, for one, says so on its own site.
• Drink tap water. Icelandic tap water is excellent. Ask for it instead of ordering bottled.
• Don't tip. It isn't expected. See Tipping in Iceland.
• Watch the drinks bill. Alcohol is where restaurant bills blow up. Buy at the airport duty-free on arrival and use happy hours; Drinking in Iceland explains how.

FAQ

What's the cheapest hot meal in Reykjavik?

A hot dog. At 880 ISK at Bæjarins beztu (as of March 2026), nothing else downtown comes close for a hot meal.

Is it cheaper to cook in Iceland?

Yes, by a lot. Even two supermarket meals a day at Bónus or Krónan will bring your food costs down sharply. Book a room with a kitchen, or a hostel with a shared one. See Hostels in Reykjavik.

Where can I try Icelandic food on a budget?

Kaffi Loki's open-faced rye bread and flatbread sandwiches are the cheapest way I found to taste plokkfiskur and smoked lamb in a sit-down cafe.

Photo by jayneandd