Visitors in Iceland often wonder how locals can live here since everything seems so expensive. They also ponder about where we shop for groceries without having to pay the white of our eye for the bare necessities while maybe secretly wondering whether there’s an underground supermarket below the city pond that only locals have access to. Although I’m not going to argue that food in Iceland is not pricey, because it is, I often feel visitors are quite unfair when they discuss these things. They sometimes make us sound like some cruel overlords that are purposefully trying to squeeze every single Euro or Dollar out of the people silly enough to visit us. Like it’s some kind of big conspiracy and the whole nation is in on it.

The fact of the matter is that we pay the same price for food as you do. The only difference is that we know where to shop and what to buy where because we live here. Just like you have the upper hand in your hometown.

There are many different reasons for why food is costly in Iceland: It’s the market size (340.000 people is not a lot y’all), it’s the fact we need to import almost everything (with high import costs, taxes, and duties) and maybe most importantly we have what in economics is called oligopoly in most markets in Iceland. What that basically means is there’s no true competition (something that is usually not considered good for consumers) because there are two or three big companies in each sector that divide the market between them. Often the companies will unofficially work together to keep the prices high, because it works in both their favor, even though officially consulting on prices like that is illegal.

This is not a specifically Icelandic problem, this is a dream scenario for most of the biggest companies in the world, but it may be easier for companies to get into this position here because of the size of the market. The important thing to remember though is that only a handful of Icelanders own these companies while the rest of us need to make do with whatever they throw our way.

The things that are produced locally are produced in such small quantities, at least compared to most bigger countries around us, that economy of scales (another economics term) doesn’t really apply here. I haven’t even mentioned the high cost of living, labor costs, rental costs and all the other things that affect the final price that you see in the Store.

I don’t want to turn this post into an economics lesson (especially since I never finished my business degree and many of you who read this are much more qualified to explain such things than I am) but it’s just important to keep these things in mind when comparing prices to your home country and before you yell at an innocent bystander about how all Icelanders are literally just the worst.

But back to the business at hand – shops where locals buy their groceries.

Most people in Iceland, that have access to one that is, will do their main shopping for the week either in Bónus or Krónan. If you live in Borgarfjörður Eystri though, for example, you will need to drive 70 kilometers to the nearest low-cost grocery store so we here in the capital are definitely spoilt for choice compared to the countryside.

Bónus is the most basic of the Icelandic supermarkets and most widely considered the cheapest (although that’s not always the case). Their stores are usually a bit cramped and only carry the most common items people need. You won’t necessarily find an eggplant or lemongrass in Bónus but you’d find plenty of potatoes and red peppers. If that explains anything.

For us as a family, we often start in Bónus and try to buy stuff like bread, yogurt, cleaning products and such and then we might go to one of the other stores for the things we couldn’t find in there. Personally, I prefer Krónan over Bónus because their stores are bigger and nicer somehow and they tend to have a better range of products that I am looking for. The prices may be a bit higher than in Bónus (not necessarily though) but if you don’t have a big home the difference is probably not huge.

Krónan also caters better to those who have any kind of dietary restrictions or preferences and offer a lot of products suitable for vegetarians and vegans and those who are gluten- and lactose-free. I also like Krónan because they do things like offering fruit to children that visit the store, have special discount sections for things that are about to expire to try to combat food waste and in Krónan in Grandi, the one we most often visit, they have pretty decent sushi that is made on the spot.

Krónan also has a much better selection of meat than Bónus for us carnivores so when we want to cook something extra nice on the weekend we usually head straight to Krónan.

When we’re looking for something special though, especially when it comes to fruit and vegetables, we tend to go to Hagkaup for that as they have a much better selection (at considerably higher prices too). We mostly go to Hagkaup before Christmas or when we’re having a dinner party or something like that when we just can’t find what we’re looking for in Bónus or Krónan.

There’s another low-cost store called Nettó but because I prefer the other two I almost never go there. They are open 24/7 at their Grandi location though so if you return back to town after a long day on the road and need a low-cost supermarket then Nettó is a good option. We usually only go to Nettó at strange hours when we have forgotten something we need ASAP. They also have all kinds of other stuff like yarn and toys and a good selection of what they call “health products” like all kinds of Stevia sweeteners, protein and such.

You will find at least one of these three supermarkets in most bigger towns in Iceland.

Another option is Costco which opened its only location in Iceland about a year ago. Since Costco opened prices have gone down all around and the local chains have stepped up their game in many departments, such as the fruit and vegetable selection since Costco was offering seemingly better quality at better prices. Icelanders love Costco and kind of look at it as their supermarket savior that can do no wrong. However, recent price surveys have shown that the prices in Costco have gone up quite a lot since they first opened and they are often far from the cheapest option. Unless you need 300 rolls of toilet paper – that is.

I don’t like going to Costco because we have a small three-person home and we just don’t need nor do we have space for 12 toilet cleaners or 40 bags of potato chips. If you’re a Costco member at home and you are traveling with a big group it might be worth checking out though. My biggest pet peeve when it comes to Costco though is the amount of packaging they use for everything but we bought some fruits and vegetables there for our wedding and our kitchen was full of plastic containers after it.

Like with everything, you also sometimes have to look at the bigger picture. Since Costco sells so much toilet paper at ridiculously low prices the only toilet paper producer in Iceland has had to lay off a number of employees due to loss of sales (Costco imports their own brand). So we have to ask ourselves as consumers: is it more important to pay less per toilet roll or support local companies (without knowing anything about the environmental factors of producing toilet paper in Iceland vs. importing it) but I guess that’s a conversation for a whole different blog post though.

One mistake we see a lot of visitors make is to go grocery shopping (walking out with 4 or 5 bags worth of stuff) at 10/11 in Austurstræti. 10/11 is not a supermarket, it’s a convenient store, and it is consistently the most expensive store in Reykjavík. They also made the news here in Iceland a while ago because apparently, their prices went up after 8 pm. I don’t know if that’s the case anymore but I do know that I would never do my shopping there even though I drop by from time to time (OK quite often since our office is close by) for a sandwich or a yogurt.

One thing I’ll give 10/11 though is that they have pretty good monthly offers where they have selected products at pretty decent prices. Our office is usually pretty up to date with which chocolate bar is on offer each month.

There are other stores that people shop at but these are the main ones we use for our daily shopping. This post is also quite Reykjavík centric since that’s where I live and shop but I wrote a pretty comprehensive post about supermarkets in Iceland a while ago that gets updated every year.

I really do believe that if you have decided to come to Iceland, knowing that it’s an expensive country, that you just have to accept it and move on. You’re going to make yourself crazy constantly comparing it to home or complaining about the prices. A supermarket in Iceland, even if it would slash its markup in half and then slash that in half, can never offer the same prices as Walmart or ASDA and all these huge stores in the US and UK for example.

What you can do, however, is be smart about your choices and choose Bónus and Krónan over 10/11 if you are shopping for groceries. It can make a huge difference, especially if you’re staying somewhere where you’re going to cook your own meals. Krónur saved on bread and cheese are krónur you can spend on something more fun elsewhere.