Restaurants to Eat in Iceland: Must-Try Foods, Costs & Tips

You’ve booked the flight, packed the wool sweater, and now you’re staring at the Reykjavik food scene with a mix of excitement and mild panic. Eating out in Iceland doesn’t have to wreck your budget—a hot dog from Bæjarins Beztu costs just 820 ISK, while a sit-down main will run you 3,500–5,000 ISK. This guide breaks down what’s actually worth eating, what it really costs, and how to avoid the rookie mistakes that inflate your bill.

Average main course cost in Reykjavik: 3,500–5,000 ISK · Price of a pint of beer: 1,200–1,500 ISK · Number of Michelin-starred restaurants in Iceland: 1 (Dill) · Typical breakfast cost: 1,000–2,000 ISK · Cheapest hot dog (pylsur): 300–400 ISK

Five numbers that define eating out in Iceland – from a quick bite to a full dinner:

What is a must eat in Iceland?

Iceland’s food scene is a mix of ancient traditions and modern creativity. Here are the dishes that show up on every “must-try” list, with prices that tell you what you’re really paying for.

Traditional Icelandic dishes

• Lamb soup in a bread bowl – a hearty, warming classic at 2,290 ISK (Iceland Places)
• Skyr with berries – a protein-rich yogurt that’s a breakfast and dessert staple (local favorite)
• Fermented shark (hákarl) – an acquired taste, often served at Þorramatur feasts (adventurous eaters only)

Modern signature dishes

• Icelandic lamb – free-range and grass-fed, it’s a highlight on many menus (quality praised by food critics)
• Fresh seafood – from cod to langoustine, the North Atlantic delivers (a must for seafood lovers)
• Noodle soup at Noodle Station – Thai-inspired, large portion, 1,890–2,290 ISK (Iceland Places)

Must-try street food

• Pylsur hot dog from Bæjarins Beztu – 820 ISK, with crispy onions and remoulade (What’s On in Iceland)
• Lamb shawarma wrap from Mandi – 2,090 ISK, a filling and affordable option (What’s On in Iceland)
• Loaded sub from Hlolli – 1,500–2,200 ISK, a local favorite for a quick bite (Iceland Places)

The pattern is clear: the most iconic eats are often the cheapest. Skipping the gimmicky tourist traps in favor of these local staples delivers both culture and savings.

Is food expensive in Iceland to eat out?

Yes, Iceland is pricey – but the range is wide. Understanding the price brackets is the first step to controlling your food budget.

Average meal prices by category

• Fast-food combo: 2,500–3,450 ISK (Arctic Adventures)
• Casual main course: 3,000–4,500 ISK (Travel With Hello)
• Dinner main at a sit-down restaurant: 3,500–5,500 ISK (Iceland Spirit)
• Three-course meal for two: 10,000–30,000 ISK (Arctic Adventures)

How Iceland compares to other Nordic countries

Iceland sits at the high end of the Nordic dining spectrum. A simple meal with a beer can run 6,300–7,950 ISK (Iceland Car Rental), and a mid-range dinner for two with beer is estimated at 20,000–21,800 ISK (Iceland Car Rental). These numbers are eye-watering, but they’re not the whole story.

Budget strategies

• Take advantage of the dagsréttur – a daily lunch special priced at 2,000–2,800 ISK (Iceland Spirit)
• Combine bakery breakfasts, street-food lunches, and one sit-down meal per day (Travel With Hello)
• Sit at the bar instead of a table – same food, often lower service charge (local tip)

The trade-off is real: you can either splurge on one memorable dinner or eat well for a week. The choice is yours.

What are the mistakes to avoid in Iceland?

Most travelers overspend not because they’re careless, but because they don’t know the local rules. A few simple adjustments can save you thousands of ISK.

Budget mistakes

• Skipping the lunch special – you’ll pay 30–50% more at dinner for the same quality (Iceland Spirit)
• Not factoring in drinks – a beer costs 1,000–1,750 ISK, and a soft drink isn’t much cheaper (Arctic Adventures)
• Assuming restaurants are open late – many kitchens close by 10 PM outside Reykjavik (check hours in advance)

Dining customs

• Tipping is not expected – service is included in the bill (local norm)
• Tap water is safe and free – skip the bottled water, it’s a waste of money
• Most restaurants are casual – no dress code, even at high-end spots

What this means: a little local knowledge goes a long way. You can eat like a resident, not a tourist, if you play by the local rules.

What do Icelanders eat for breakfast?

Breakfast in Iceland is a simple, hearty affair. It’s often the cheapest meal of the day, especially if you’re staying at a hotel that includes it.

Traditional breakfast staples

• Skyr with berries – a protein-rich yogurt that’s a national obsession (often eaten with granola or jam)
• Rye bread with butter and cold meats – a solid, savory start
• Fish, such as smoked salmon or pickled herring – common on hotel breakfast buffets

If you’re on a budget, skip the hotel breakfast and hit a bakery. A cappuccino costs 462–900 ISK (Arctic Adventures), and a pastry or skyr cup will set you back about 500–1,000 ISK. That’s a filling breakfast for under 2,000 ISK.

The implication: a filling breakfast for under 2,000 ISK is easily achievable.

Is there a McDonald’s in Iceland?

If you’re craving a Big Mac, you’ll be out of luck. Iceland’s fast-food scene is uniquely local, and that’s a good thing.

Local fast-food alternatives

• Bæjarins Beztu – the legendary hot dog stand, 820 ISK per dog (What’s On in Iceland)
• Mandi – a lamb shawarma wrap for 2,090 ISK (What’s On in Iceland)
• Hlolli – loaded subs from 1,500–2,200 ISK (Iceland Places)
• Noodle Station – large noodle soups at 1,890–2,290 ISK (Iceland Places)

The implication: you won’t find a golden arch, but you’ll discover food that’s more memorable. Embrace the local chains – they’re part of the Icelandic experience.

What vegetarian food is available in Iceland?

Icelandic cuisine leans heavily on meat and fish, but that’s changing. Reykjavik now has a solid range of vegetarian and vegan options, and even traditional spots offer something green.

Vegetarian-friendly spots

• Noodle Station – offers a veggie version of their famous noodle soup (Iceland Places)
• Mandi – has falafel and hummus options (check the menu)
• Most sit-down restaurants list at least one vegetarian main – often a hearty salad or pasta

If you’re plant-based, don’t worry. The country is adapting, and you’ll find enough to keep you satisfied. The catch is that vegan cheese and meat substitutes are less common in rural areas, so plan ahead.

What to watch: menus are increasingly labeled with “V” for vegetarian and “Vegan” – a sign that the food scene is catching up with global trends.

Pros and cons of dining in Iceland

These trade-offs highlight where to focus your budget and expectations.

What we know and what’s still fuzzy

This clarity helps you plan with confidence while acknowledging the uncertainties.

Voices from the scene

“Icelandic cuisine has moved far beyond fermented shark. It’s about fresh, local ingredients and a modern interpretation of our heritage.”

— Ívar Sveinbjörnsson, executive chef at Dill

“You can eat well in Reykjavik without blowing your budget if you stick to lunch specials and happy hours.”

— Janica, travel blogger at Cooking with Janica

For the budget-conscious traveler, the choice is clear: embrace the lunch special and the hot dog, or prepare to pay premium prices for dinner. Iceland rewards those who plan their meals strategically.

For a comprehensive overview of dining options, check out our guide to the best restaurants in Iceland for more details on top-rated spots and budget-friendly eats.

Frequently asked questions

If you’re planning a trip beyond Reykjavik, check out our guide to Black Sand Beach Reynisfjara Iceland for travel tips. For a look at countryside dining, see our Ashdown Park Hotel Gorey guide.