How to Eat on a Budget in Iceland

Iceland Intro Collage

By: Jennifer Renaud

Here are the straight goods: Iceland is an awesome place to visit. It’s picturesque, it’s rugged and it’s otherworldly. But most of all, it’s probably unlike anywhere that you’ve been before – and that’s exactly what drew me there. However, as a frequent traveler I need to pick and choose where I spend my money, so when it came to eating on a budget in Iceland – an island renowned for its expensive consumables – I had a challenge on my hands.

It makes sense: Iceland doesn’t produce a lot of food or alcohol locally, so they have to ship it in. Once you factor in the flights, boat trips and the mark-ups of the restaurants, it adds up quickly. Make no mistake: food and drinks in Iceland is EXPENSIVE. But the experience of visiting this island is so worthwhile that it’d be a shame to be put-off just because you don’t know where to go to eat like a local. A little research before you arrive goes a long way, so let me help you out a bit.

First tip:  if you’re planning on having a night on the town, consider buying your booze at the airport. You’ll notice when you arrive that basically your entire flight will head straight for the duty-free shop once they’ve grabbed their luggage. FOLLOW THEM. Alcoholic drinks in both stores and bars are shockingly pricey so most locals will have a few cocktails at home before heading out for the night, choosing to buy only one or two drinks at the bar. Also: don’t feel the need to buy a ‘round’ of drinks for your friends and new acquaintances.   Since it does tend to be expensive, no one expects you to do that – and likely won’t reciprocate. Seriously.

Second tip:  grocery stores are your wallet’s best friend. When I’m traveling I like to keep lunch on the (extra) cheap side and so I always head for grocery stores or well-stocked gas stations for a picnic-style mid-day meal. Reykjavík is sprinkled with options that suit this purpose so find one or two close to your hotel and make sure you check them out. Trust me; you’ll want to save your money for dinner.

A few things to keep an eye out for at the grocery stores:

– Skyr:  Pronounced ‘skeer’.  I fell in love with Skyr while I was in Reykjavík. This favourite is a classic Icelandic yogurt (actually ‘soft, fresh cheese’ but really, yogurt). It comes in a lot of flavours and as a bonus to all of us utensil-less travelers, it comes with it’s own spoon. It’s a generous portion and if you’re not too ravenous, you can pair it with a piece of fruit or a baguette and it could serve as your entire lunch.

– The packaging:  From milk to juice to the supermarket logos themselves (I’m talking to you Bónus and your drunk pig mascot), marketers in Iceland love to put cartoons on everything. Aside from just picking up something to eat, make sure you tour around the store looking at all the interesting packaging manifestations. Special mention goes to Cool Ranch Doritos, which have somehow been re-cast as Cool American. It’s a pretty awesome take-home souvenir – if you can find room in your luggage.

– Kleina:  This is a traditional fried dough pastry, akin to a dense donut, that is often served at breakfast. It’s tasty – though perhaps not show stopping – but worth a try at least once with your morning coffee.

– Hot Dogs:  Known as pylsur on the island, hot dogs are an institution in Iceland. No respectable Friday night on the town can end without a piping hot tube steak and the locals do it best: wrapped in bacon.   I’m not the biggest pylsur fan save for perhaps at the ballpark but I will say that the Icelandic enthusiasm for this particular dish is catchy.   You’ll be able to find it all over town – including grocery stores – but I’d recommend watching someone make it fresh if possible and avoid the ones that have been glistening on rollers under heat lamps for goodness-knows-how-long.

Iceland Grocery Store Collage

This brings me to dinner, an expensive proposition at best. There are all sorts of restaurants that offer what they call ‘authentic’ Icelandic food which, based on traditional recipes and current availability, can range anything from minke whale skewers to smoked puffin. If you’re feeling adventurous and have the cash to back it up, it might be fun to take advantage of the unusual offerings and you’ll likely come away with a fantastic story to bring home to your friends. Just know that it’ll decimate your pocket-book and I’ve yet to hear someone say, ‘Wow, that hákarl (putrescent shark meat) was friggin’ delicious!’

If you’re aiming for the more frugal end of the spectrum, rest assured that with a little planning and inside knowledge, eating out on a budget CAN be done! A few options that we discovered in Reykjavík on our trip:

– Krua Thai:  Located right downtown by the water, this tucked-away spot has big portions of pad Thai and stir fry for a relatively low-cost. It’s not fancy but it’s hearty.

–  Austerlanda Hradlestin (Indian Street Food):  I never imagined that I’d get some pretty darned tasty Indian food in the heart of downtown Reykjavík but I did, and for a reasonable (by Icelandic standards) price to boot. The trick here is that there is also a full-service restaurant called Hradlestin but make sure you’re looking for the Austerlanda Hradlestin which is the take-out kiosk located around the corner from the downtown location. There are a few tables inside where you can enjoy your meal but mainly it’s a walk-up counter for ordering and there are no wait staff.

– Grái Kötturinn:  This tiny coffee shop located a step down from the street behind a bright red door is closed during typical dinner hours but if you’re up to see the sun rise after a night on the town (or you’ve just arrived on the red-eye), this is a great spot to get a delicious and reasonably priced American-style breakfast.

Jenn, herself

So don’t let the hype get you down. Iceland IS an expensive country to visit. But if you’re willing to put in a bit of research beforehand and can relish the joys of wandering the grocery store aisles while you’re there, you can stretch your krona (Icelandic dollars) pretty far. And trust me, it’s absolutely worth the trip.

One final note: water. I’m the kind of girl who won’t drink the tap water anywhere outside my area code. It’s not snobbery; it’s purely gastro preservation. But the first time I landed in Reykjavík was in the middle of the night; all the shops were closed and I was reaching a raisin-status of dehydration. That is the ONLY reason I found myself getting talked into taking my water bottle into the bathroom and filling-up at the tap. What can you do at that point but lift the bottle to the heavens with a hopeful/cringing ‘bottoms up!’ Aside from the fact that I obviously lived to tell the tale, I actually liked the water. And not only at the airport, but all over Reykjavík. So bring your water bottles and fill ‘er up when you can. You’re better off saving your money for the fermented herring anyway.


4 Comments Add yours

  1. Tap water in Iceland is not treated, so you can really drink it safely ! 🙂

  2. Very helpful information. Fun and well written!

    1. travelmammal says:

      Thanks Floyd! Make sure to subscribe and follow us on social for more content!

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