Shopping in Reykjavik: Markets & Districts

Reykjavik's main commercial artery stretches roughly 1.5 km from Hlemmur square westward into the city center. The eastern end near Hlemmur leans toward everyday Icelandic life, with phone shops and a Bónus discount grocery. Walk west and the street shifts to boutiques, outdoor gear retailers, and Icelandic design stores. Between 14:00 and 17:00 on weekdays, locals still outnumber visitors in the eastern half. The smell of roasted coffee drifts out of half a dozen cafes along the route, and the soft click of knitting needles carries from a few of the smaller wool shops. Several lopapeysa vendors cluster around the mid-street blocks, where hand-knitted sweaters hang in windows, their rough lopi wool visible through the glass, next to rain jackets and thick wool blankets.

Best for: Icelandic design, outdoor gear, wool sweaters, browsing between cafes

This sloping street climbs from the Laugavegur intersection up to the hilltop church that dominates Reykjavik's skyline. Galleries, jewelry workshops, and ceramic studios line both sides of the roughly 400-meter ascent. Several silversmiths work with Icelandic volcanic stone and lava beads, and you can sometimes spot the glint of molten silver through a back-room window. The foot traffic stays calmer than the main shopping drag below. Worth noting, a few ceramic artists fire their pieces in workshops behind the storefronts, so visiting before noon might let you catch someone mid-glaze. The Handknitting Association of Iceland operates its cooperative shop along this stretch, where members sell verified handmade lopapeysa directly to buyers.

Best for: Handmade jewelry, ceramics, art galleries, cooperative-sold Icelandic knitwear

Bankastræti connects Laugavegur to Austurvöllur square, where the Alþingi parliament building faces a small public green. The street runs maybe 300 meters but packs in several Icelandic fashion labels and a handful of bookshops. Government workers grab lunch along here on weekdays, and the clothing stores lean toward Scandinavian minimalism rather than tourist fare. The Bankastræti storefronts carry a slightly more dressed-up feel than the Laugavegur shops. You'll find Icelandic literary culture well-represented in the bookshops, some of which stock English translations of the sagas alongside contemporary Icelandic fiction.

Best for: Icelandic fashion brands, bookshops, Scandinavian design

The former fishing-warehouse district along Grandagarður has shifted toward design studios, food ventures, and creative workshops over the past decade. Grandi sits about a 15-minute walk from Laugavegur along the waterfront. The air near the Old Harbour piers still smells of salt and diesel from the working docks. Working trawlers still offload their catch at the quay. You'll find Icelandic fish-leather goods, repurposed fisherman's gear, and small-batch cosmetics in the converted buildings. The neighborhood tends to attract fewer tour groups than the 101 core, so browsing feels unhurried. One of Iceland's few bean-to-bar chocolate producers occupies a converted warehouse here, and the warm, roasted-cacao smell drifts into the hallway.

Best for: Icelandic design studios, artisan food products, fish-leather goods

Kringlan sits about 3 km east of downtown, reachable by Strætó bus routes 1, 3, and 6. It opened in 1987 and remains Iceland's best-known indoor mall, with around 150 shops and services under a warm, brightly lit interior. This is where Reykjavik locals do their everyday shopping. You'll find H&M, Hagkaup grocery, Icelandic bookstores, and a few local fashion brands here. The food court on the upper level serves Icelandic fast food alongside the usual international chains. Strætó bus 1 runs from Hlemmur to Kringlan in about 15 minutes.

Best for: Everyday shopping, bad-weather fallback, Icelandic bookstores and groceries