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Where to Eat Cheaply in Iceland Local Guide: Budget Food Guide & Real Prices

✎ RoamLight Editorial📅 2026-01-01⏰ 7 min read

If you’re venturing to Iceland and want to experience local cuisine without depleting your wallet, you’re in for a treat! This Iceland Local Food Guide is packed with practical insights, real prices, and tips to help you navigate the culinary landscape while keeping your budget intact. With a small population of around 370,000, Iceland may seem isolated, but its food scene is vibrant and rich. From traditional dishes to street food, there’s plenty of affordable and delicious options waiting for you.

What Are the Must-Try Traditional Icelandic Dishes?

Icelandic cuisine is heavily influenced by the island’s geography and history. Expect hearty dishes that celebrate lamb, seafood, and dairy. A quintessential dish to try is skyr, a thick yogurt-like product found in supermarkets and cafés alike. You can grab a cup for about 400 ISK (around $2.80), making it a perfect breakfast or snack option.

Another staple is lamb soup (kjötsúpa). This comforting dish combines local vegetables with tender lamb and is served in many cafés and restaurants for about 1,500 ISK ($10.50). For those feeling adventurous, hákarl, or fermented shark, is a traditional delicacy. You might want to sample it at local markets like Kolaportið in Reykjavík for a true taste of Icelandic culture.

How to Find Budget-Friendly Eateries in Reykjavík

Reykjavík is home to numerous budget-friendly dining spots. A popular choice is Bæjarins Beztu Pylsur, an iconic hot dog stand at Tryggvagata 1, where you can savor an Icelandic hot dog topped with fried onions and remoulade for just 500 ISK ($3.50). It’s a quick, satisfying meal that’s a must-try!

If you’re in the mood for pizza, head to Kex Hostel on Skúlagata 28, where a slice will run you about 1,000 ISK ($7). This lively hostel is often buzzing with local music and has a great atmosphere.

For a taste of traditional dishes, check out Café Loki at Lokastígur 28, near Hallgrímskirkja. Here, you can indulge in lamb soup or even unique offerings like rye bread ice cream for about 2,200 ISK ($15). If you want to save even more, consider picking up a sandwich or snack from local grocery stores, with prices starting around 800 ISK ($5.60).

Cost Breakdown of Eating in Iceland

ItemApprox CostNotes
Skyr (cup)400 ISKGreat for breakfast or a snack
Lamb Soup1,500 ISKHearty and filling
Icelandic Hot Dog500 ISKStreet food classic
Pizza Slice at Kex1,000 ISKCasual vibe, often live music
Café Loki’s Lamb Soup2,200 ISKTry the rye bread ice cream too!
Prepared Sandwich800 ISKPerfect for picnics
Loaf of Bread250 ISKGreat for self-catering
Liter of Milk200 ISKEssential for breakfast

Where to Buy Groceries for Self-Catering

One of the best ways to save money in Iceland is through self-catering. Supermarkets like Bonus and Krónan are your go-to spots for affordable groceries. A loaf of bread typically costs around 250 ISK ($1.75), and a liter of milk is about 200 ISK ($1.40).

When stocking up, don’t overlook local snacks. Dried fish, chocolate, and Icelandic snacks are delicious and relatively inexpensive. By preparing your meals, you can enjoy Iceland’s beautiful scenery while saving a few extra krónur for activities!

How to Enjoy Icelandic Street Food on a Budget

If you’re looking to experience Icelandic street food without breaking the bank, try out local food trucks and stalls. One popular food truck is Reykjavík Street Food, where you can find fish and chips for about 1,900 ISK ($13.30). It’s a great way to dive into local flavors while keeping your meal affordable. Another option is the food stalls at Kolaportið, the weekend flea market, where you can sample various local foods, including hákarl and traditional pastries.

Tips for Saving Money on Meals in Iceland

Eating out in Iceland can be pricey, but there are several strategies you can use to keep costs down:

What is the average cost of food in Iceland?

The average meal in a restaurant ranges from 2,000 to 4,500 ISK ($14 to $31). Fast food and street food options can be found for as low as 500 ISK ($3.50).

Is it expensive to eat out in Iceland?

Yes, eating out in Iceland can be pricey compared to other countries. However, by choosing local eateries and street food, you can enjoy delicious meals without overspending.

Where can I find cheap eats in Reykjavík?

Look for food trucks, hot dog stands, and local cafés. Bæjarins Beztu Pylsur and Kex Hostel are excellent places to start for budget-friendly options.

Insider Tip: Join local food tours or check community boards for pop-up dinners or events. Sometimes, you can enjoy incredible local meals at discounted prices while meeting fellow travelers!

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