One of the commonest questions I get about visiting Iceland is if it’s possible to do it on a budget and if eating out in Reykjavik on the cheap is even possible. With tourism booming in Iceland as it is, your likely to be confused with the sheer number of restaurants in Reykjavik. Where to eat in Reykjavik on a budget is a question that can have a huge impact on your Iceland travel budget.
Many of my readers who’ve been saving up for what they rightly believe will be the trip of a lifetime would rather spend their money on surreal experiences like hiking on a glacier, exploring lava caves, swimming between tectonic plates, or chasing waterfalls, rather than expensive meals at fancy restaurants in Reykjavik. And after spending a fair amount of my time (and cash) there, I totally agree and so I bring you this guide to places to eat in Reykjavik on a budget.
During both of my visits last year (winter and summer), I stayed true to my slow travel style and spent long enough to discover cheap places to eat in Reykjavik. In summer I’d already spent a month in Stockholm, so my budget was stretched pretty thin. I was very careful about how much I spent for every meal but I knew I wanted to try as many different places as I could so I wouldn’t get bored and could write up a decent guide for cheap restaurants in Reykjavik, based on my own experiences.
I’m really not picky about food and of course, I didn’t buy any drinking water because in Iceland, why would you? The tap water is perfectly safe to drink. Breakfast in Reykjavik isn’t really a big affair, I had access to a kitchen and refrigerator (something most Airbnbs offer) and I bought eggs, bread, milk, bananas, and skyr (the delicious local soft cheese that tastes like yogurt) from the supermarket. If you’re wondering about the cheapest supermarkets in Reykjavik, here’s a useful post by a Reykjavik local. If you’re looking for other tips about what to do and where to stay in Reykjavik, here’s my ultimate first-timer’s guide to Reykjavik.
On days that I wanted a light lunch or dinner, I’d pick up deli-style sandwiches from supermarkets. The Chicken pesto Focaccia at 10-11 was my favorite but there are many options for under 1000kr ($8-9). I did indulge in the occasional (okay maybe a little more than that) latte when my creativity was begging for more fuel and I had deadlines to smash.
Places to Eat in Reykjavik on a Budget
Krua Thai Express
I absolutely love Thai food and couldn’t resist from stepping into Krua Thai late one afternoon for lunch, warmed by the thought of basil and lemongrass and spicy Thai flavors. I ordered the Chicken Panang curry with rice and it was pretty good. I was surprised by how big the portion was. If you order appetizers or don’t have a big appetite, it’s easily good for two.
What I ate: Chicken Panang curry with rice for 1690kr ($15)
Cuisine: Middle Eastern
After being away from Dubai for three months, of course I was craving for some real Lebanese food and a friend suggested I check out Habibi, close to the harbor. I’m happy to report that their Chicken Shawerma (grilled marinated chicken slices with salad and sauce in a wrap) satisfied that craving and tasted more Lebanese than a lot of other impostors I’d tried recently. The chicken was juicy and the sauce was almost authentic. This simple restaurant is on one of the quieter streets in Downtown Reykjavik and you’re more inclined to walk past it but I think it’s a good value-for-money place to eat.
What I ate: Chicken Shawerma Sandwich for 1300kr ($11.50)
Cuisine: Sandwiches and subs
This place features on the list of Icelanders who find themselves asking: Where to eat in Reykjavik on a budget?! This no-frills sub and sandwich place reportedly gets quite busy on weekends, especially since it’s one of the few places in town that stays open late at night and serves the voracious appetites of drunk party-goers. In the day, it’s quiet and bright with lots of seating. Choose from sandwiches, subs, and hamburgers. I’m not sure why I tried the Curry Sandwich (curried chicken), maybe it’s about wanting a good laugh about how every confusing combination of flavors is labeled ‘curry’ around the world, but it was actually quite good and not as greasy as I was told it would be.
What I ate: Curry Sandwich for 990kr ($8.74)
Cuisine: Turkish and Mediterranean with a little Asian thrown in the mix
While I stepped into this simple restaurant because the name sounded Turkish (and I love Turkish food), I was surprised to see that the menu had Thai Tom Kai soup and Indian vegetable soup. They serve breakfast, soups, salads, sandwiches, paninis, quesadilla, wraps, and pizza. Lunchtime can be busy, especially if you want to dine in. The chicken wrap with chicken, hummus, vegetables, cheese and yogurt sauce was delicious and just the right size for a light meal.
What I ate: Chicken wrap for 1290kr ($11.40)
Cuisine: Healthy, raw, and vegan
Gló is quite popular with Reykjavik’s healthy-eating, vegan, organic, and raw food loving locals, so I decided to check it out even though it was slightly more expensive than other places on this list. It’s quite busy during lunch but the place is spacious and you’re sure to find seating.
The menu changes daily and includes a raw food, vegan, and chicken dish and a soup of the day. It’s written down in English and Icelandic on a blackboard across from the counter. If you’re not sure, you can also look at the displays in the deli counter. You can choose to buy a wrap or sandwich only or add a little extra to include salads. I ordered a chicken wrap- it was clean and delicious and perfectly filling with coleslaw, potatoes, and quinoa salad as sides.
What I ate: Chicken wrap with three salads for 1899kr ($16.80)
Cuisine: Middle Eastern (but they’ve got pizza)
After reading glowing reviews online, I thought my dinner at Kebab Húsið was going to be amazing, so I patiently waited in line for thirty minutes on a very busy evening. The place was packed, mostly with tourists- maybe that should have been my hint. I ordered the Chicken Kebab in Pita bread. Then I waited. And waited.
I listened in on the conversation on the table behind me where a girl was singing praises of the pizza. I saw orders come and people tuck into fish and chips and kebabs. I saw groups that had been waiting in line behind me pay and leave. I saw the staff not pay any attention to the only solo diner in the busy restaurant- me. Then just as I told myself that even if I did get up and walk out, not a single member of staff would notice, my order came. By this point, I was quite hungry and I thought the amazing kebab might be redemption enough. The Chicken kebab was nothing special, and the total amount I paid along with a side of fries didn’t feel like it was worth it at all.
For all you know, that evening might be an exception, but I’m just being honest about my experience here.
What I ate: Chicken Kebab with fries for 2000+kr ($18)
Cuisine: Icelandic and Fish & Chips
I’d spent the evening by the harbor and Reykjavik Fish, just across from the harbor, looked warm and inviting, so it took only a few seconds to make my mind up about dining there. I saw both locals and tourists dine here and the queue to order might seem long but moves along quickly. Service is top-notch and friendly and it’s the kind of place where you wouldn’t want to rush with your meal and leave. The Fish and Chips are amazing- fresh and just the right kind of crispy and so good you’ll wish you ordered two portions.
What I ate: Fish and Chips for 1390-1590kr ($12-14) depending on extras and condiments.
XO, outside of the tourist hotspot of Downtown, was an excellent recommendation by my friends Ingo and Sif, and we went for dinner here one evening. The place is simple but you can expect salads, pizza, doner sandwiches, and fantastic chicken mains, wok style, with flavors ranging from Indian to Italian. They also have a wide range of healthy and detox juices. I tried the Chicken Tandoori style, it came with sweet potato, raita, rice, and salad and was delicious, and the price of course was hard to beat.
What I ate: Chicken Tandoori Style for 2,195kr ($19)
The last two times I’d tried Indian food in the past two months has been in Stockholm and apart from the appearance, there had been nothing Indian about it. But when I passed by Hradlestin, I felt like there was hope that Indian flavors might have somehow truly found their way to these almost Arctic shores. While I wouldn’t say this was a budget meal, craving as I was, it was still completely worth it.
The décor of the restaurant is beautiful with posters of old Bollywood movies and the ambience is inspired from that of a dhaba (Indian restaurant in the countryside). I went for dinner and ordered a Non-Vegetarian Thali that came with three different curries, raita (spiced yogurt), naan, and rice. Both chicken curries were delicious, as was the vegetarian, and surprised as I was, the flavors were authentic. While my server had asked if I’d have like the food to be spicy, to which I’d replied in the affirmative, it really wasn’t spicy at all. Later, while talking to my server, I learnt that Hradlestin is the oldest Indian restaurant in Iceland, run by an Indian and the chefs are Indian as well. They are careful about the spiciness to adapt the cuisine to Nordic tastes. Fair enough. The service was friendly, prompt, and attentive.
To sum up, my dinner here was my most perfect date for one in Reykjavik.
What I ate: Non-veg thali for 2900kr ($25)
Cuisine: Fish and seafood
Bergsson Mathús is great for breakfast or a seriously filling and healthy lunch (I couldn’t finish my order of grilled fish and vegetables on the side) that was delicious. They often have lunch deals and visiting with two others meant that each meal came at a reasonable price and included black coffee with refills.
What I ate: Grilled fish and side of vegetables (including coffee).
This bistro, café, bar, and restaurant in the city center is a local favorite hangout with good food (from Tex-Mex to pasta) and a fun vibe. Great any time of the day (lunch, dinner, and drinks). This is also one of the coolest places for weekend brunch in Reykjavik. The Louisiana Chicken Strips are the best thing I’ve tried here.
What I ate:
- Louisiana Chicken Strips for 2790kr ($25)
- Penne Pasta for 2790kr ($25)
Baejarins Beztu Pylsur
Cuisine: Hot dogs
If you’re on a budget in Iceland, you have to know that hot dogs, that many Icelanders joke are the national dish of their country, make for the cheapest meal you’ll find all over the country. Most gas stations and many supermarkets serve hot dogs and there are hot dog stands in most towns. But Bæjarins Beztu Pylsur in Reykjavik is often called the most famous hot dog stand, not only in Iceland, but also the world. Why? Because Bill Clinton lent it some sparkle when he visited Iceland in 2004 for a conference and tried it. Later, the likes of Anthony Bourdain, Ben Stiller and Metallica dined here.
Today the stand, located at the harbor since 1937, whose name translates to “the best hotdog in town” sees long lines of tourists queuing up, even as they ignore the chilly wind coming in from the harbor. I joined them on my second trip and though the price of 420kr is great, there’s nothing special about the hotdog itself. I got one with everything except the raw onions. The next time I walked by the street, I felt sorry for the tourists in the long queue. For me, the hotdog really didn’t live up to the hype. It’s just famous, well, because you know it’s famous and a lot of really famous people tried it.
What I ate: Hotdog with everything for 420kr ($3.71)
I wouldn’t be surprised if someone were to tell me that this café serves the best coffee in Iceland. It definitely was the best I tasted in all of my days there and I drank a lot of coffee everywhere I went, thanks to my severely caffeine-addicted friend. I found this cute café in the Old Harbor while looking for a place to rest and wait for the light to change around sunset so I could better photograph the harbor. The décor is lovely, warm, and inviting, as is the friendly owner who sources the coffee beans from Haiti. While you’re there, order a chocolate cake, might make you stay longer than intended.
Quirky, cute, and cozy, Café Babalu, located on my favorite street in Reykjavík, is a lovely place with bright and unusual décor and a warm vibe that will uplift even the dampest of spirits on the most miserable of cold days. Spread over two levels, the house has nice details like a narrow winding staircase and furniture you’d find in someone’s home. It’s the perfect place to spend your afternoon or evening with a notebook or novel. Wide range of teas available. I have heard good things about the lamb soup here but haven’t tried it yet.
Located on the top floor of the Mál og Menning bookstore, this café serves good coffee, light sandwiches and meals, and is an ideal place to read or get some work done. I spent an afternoon working here and I’ve never written quite as quickly!
Sæmundur í Sparifötunum, KEX Hostel
This gastro-pub located in the famous KEX Hostel is one of the more popular-with-locals pubs in Reykjavík. The place has a cool hipster vibe, nice view of the sea, and live music. The building itself used to be a biscuit factory.
When my friend told me we were going out for a drink, the last thing I expected was a Tiki bar because that’s hardly the type of thing you imagine on a snowy winter evening in Reykjavík but Bar Ananas, exactly that, was a surprise. Tropical inspired interiors, great Tiki cocktails including Mai Tai and a happy hour, and a delicious Tapas platter, it was all I needed to forget that the temperature outside was 2 degrees Celsius!
The best parts of visiting Iceland are to be found outdoors; in the otherworldly landscapes and adventure activities. While Iceland is home to more once-in-a-lifetime experiences than you can imagine, the culinary one, for me, isn’t top of the list. I’m always on a budget in Iceland because it is turning into one of the most expensive countries in the world for tourists right now. Obviously, if I have no choice but to eat out then knowing where to eat in Reykjavik on a budget is a priority.
But that hardly matters to me because I share this comforting familiarity with Reykjavik, its narrow streets with names that were at first impossible to pronounce but now rattle off my tongue with relative ease, its peaceful harbor lined with cozy, if slightly overpriced cafés, its buzzing weekend flea market, and the interesting window displays and fairy lights on Skólavörðustígur that lead the way to Hallgrímskirkja, only the most mesmerizing church I’ve seen.
I hope this guide helps you plan your own budget trip to Iceland. Here are other posts about Iceland that cover activities, sights, experiences, and practical information on how to pack for Iceland and what to expect on a winter trip to Iceland.