Why are the prices so high in Iceland?

Why is Iceland so expensive?

Iceland is relatively expensive compared to many other countries but on the other hand, the average salary is higher than in most other countries. There are several reasons for Iceland’s high prices, including a small market, oligopoly, high reliance on imports, geographical isolation and high import taxes and tolls. Not everything is expensive in Iceland, however, the most notable exception is energy, including electricity, water and geothermal power, which is relatively cheap. That is an advantage for Iceland during the current global energy crisis.

Iceland’s geography means that most goods are imported and products need to be transported on container ships or by air. The small market only has a handful of companies handling imports to Iceland. Two companies take care of most shipping and the air cargo transport industry also has limited competition. The climate doesn’t help, as harsh weather conditions in winter can negatively impact transportation. 

Oligopoly is a wide-ranging issue across sectors. Most Icelandic grocery stores are run by one of two companies, Hagar and Festi with a single location of American Costco as their main competitor. The same two companies own most gas stations and Costco runs one station, which also happens to be the cheapest alternative for car owners. And the list goes on.

Taxes in Iceland are high, including import taxes, and again, it’s due to Iceland’s small market and population. However, the state maintains a strong infrastructure, e.g. a wide-ranging welfare system and an extensive road network. When fewer people shoulder those costs, it means higher taxes per person. The state also levies heavy tolls on imports in order to maintain local production, for environmental, social, and safety reasons. Local production, e.g. food production, does not have the same economies of scale as producers in other countries and therefore cannot keep the prices down to the same level. In order to support local production, protective tariffs are used on imports. These reasons seemed validated e.g. during the Covid pandemic when global supply lines were disrupted.

Iceland’s small population leads to a small market making it less attractive to global companies. A good example is from the global financial crisis in 2008 when the exchange rate of the local currency ISK plummeted. McDonald’s no longer considered Iceland a feasible market to operate in, so they shut down all McDonald’s locations in the country. A side note: Some Icelanders were happy to see the American burger chain leave the country while others missed it immediately, some to the extent that the first thing they do when visiting other countries is to grab a McDonald’s burger. In a similar vein, some Icelanders have regularly complained about the lack of Starbucks, but the café chain has never seen a reason to open a branch in Iceland due to the small size of the market. 

When Costco opened a store in Iceland in 2017, there was great excitement in the air, as Icelanders were only used to local grocery stores like Bónus and Krónan, where the variety is limited compared with other countries and prices are also significantly higher. The hype was so great that a large part of the population joined a Facebook group for sharing photos and prices of products bought in Costco. When this is written, roughly 25% of Iceland’s population are members of the group (97,482 members while the population of Iceland was 387,800 at the end of 2022).

Tourism has raised prices in certain categories, most notably the housing market where the explosion of Airbnb rental availability has limited the supply of housing available for locals to rent and pushed up prices. During the pandemic when tourism dried up in Iceland temporarily, the prices of rental housing unexpectedly went down after several years of steep increases, ever since the tourism boom around 2010. The government has taken initiatives to mitigate the Airbnb effect by setting a maximum of 90 days for short-term rental per year on the same tax level as other housing rentals. If people want to rent their apartments for more than 90 days each year, they’re taxed as if they were a business in the hospitality industry.

Through the years, Iceland has had numerous vicious circles of relatively steep salary increases followed by price increases, inflation and increased interest rates. At the time of writing, we are going up with the rollercoaster, as ongoing labour talks have proven tricky to resolve. Some workers are striking in an effort to get higher wages and the Central Bank just increased the interest rates for the 11th time in less than two years to combat inflation, which will in turn increase interest rates on people’s mortgages and increase the pressure on higher salaries. 

The other side of the coin is that Iceland offers higher salaries and a relatively high purchasing power despite the high cost of living. In times of crises and rapid inflation, locals tend to do what they can to minimise such effects by reverting back to traditions from a time when tough times necessitated a more frugal way of life. For example, when the financial crisis hit in 2008, people started to buy and even make their own slátur (an Icelandic speciality from the innards of sheep, similar to the Scottish haggis). The innards of sheep also increased in popularity as the main ingredients for dinner, e.g. hearts, liver and kidneys. In times of crises, people also tend to buy more wool and the popularity of knitting goes up. Not only are woollen hats, mittens, and sweaters great for keeping out the winter cold, but the knitting itself is a pleasant, relaxing activity. Recipes for a classic fish stew (plokkfiskur) start to appear more frequently, and baking and bringing lunch packs to work or school become commonplace.

For tourists in Iceland, there are various ways to save while enjoying a great trip. For breakfast, you could get ingredients from the low-cost grocery stores such as Bónus (the cheapest supermarket in Iceland) and Krónan instead of more expensive convenience stores , e.g. oats, raisins, skyr, bread, butter, cheese, vegetables, coffee and juice. If you are taking a road trip, you can save time (and have more time to explore the country) by packing lunch to have on the way instead of eating in restaurants. When you want to eat out, these are among the more economical options in Reykjavík:

  • Mandi offers Syrian food like shawarma and falafel and is probably the most popular lunch place in Reykjavík (it has a branch downtown and in Skeifan)
  • The Noodle Station in Reykjavík is also widely popular and offers noodle soup available in three variations: chicken, beef and vegetable, along with a mix of secret ingredients
  • Café Loki downtown Reykjavík offers a nutritious and filling Icelandic lamb meat soup and fish stew with rye bread 
  • Ramen Momo produces organic fresh noodles. Most of the ingredients in their dishes are locally made
  • 101 Reykjavík Street Food specializes in local food as well as international favourites, e.g. fish & chips, Icelandic fish stew and lamb soup (kjötsúpa)

In short

To sum up the points above, these are the main reasons for high prices in Iceland:

  • Geographic isolation
  • Oligopoly with very few companies dominating various sectors
  • High taxes and import tolls
  • Small population, hence a small market
  • Many global companies don’t see the market as feasible (e.g. McDonalds, Burger King and Starbucks)
  • Tourism has increased demand in some sectors and thereby the prices, most notably in housing, with Airbnb rentals 

Despite high consumer prices, salaries are also high, which makes for a relatively high purchasing power in international comparison. Then there are various ways for people to save, including buying food in supermarkets rather than restaurants.

See also our ASK IR on the cost of living in Iceland.

Imported Premade Sandwiches Sold Cheaper Than Icelandic Equivalents

Imported goods and food have long been a standard feature of Icelandic life, but a new product that’s made its way onto the local market is raising the hackles of some who question both its carbon footprint and its price-point. Mbl.is reports that premade sandwiches are now being shipped to Iceland from Lithuania and sold at a cheaper price than their domestically produced equivalents.

The imported sandwiches, which are sold under the brand name Food on Foot, caught the attention of Friðrik Árnason, the owner of Hótel Breiðdalsvík in East Iceland. “We import all sorts of things to Iceland, but it never occurred to me that I’d see imported premade sandwiches from Lithuania in a shop in South Iceland,” Friðrik wrote in a post on his Facebook page. “To be honest, I was disappointed to see this, thinking about the environment, carbon footprints, and sustainability. I was even more shocked when I saw that the imported sandwiches are half the price of the sandwiches that are made here, with the same ingredients. It’s a head-scratcher for me.”

The sandwiches, which are shipped frozen to Iceland, are imported by the Reykjavík-based company Danól. Managing director María Jóna Samú­els­dótt­ir provided a written response to Mbl after being contacted about the new product and said that the sandwiches are high-quality and have received a good response on the Icelandic market.

When asked how a sandwich made in and shipped all the way from Lithuania could be cheaper than a sandwich made in Iceland, María Jóna wrote: “Of course we can’t speak to other parties’ price points, but Danól has a good business relationship with the supplier, which of course, is also producing for a much larger market than the one in Iceland. And as a result, consumers here in Iceland enjoy economies of scale.”

María Jóna ended by saying that the primary purchasers of the Lithuanian sandwiches are cafés in rural areas (“often remote villages”) that “see that favorable prices, product quality, and ease of service go hand in hand.”

Prices Expected to Keep Rising in Iceland

Finances in Iceland

Commodity prices on world markets are at an all-time high and Iceland has not escaped the effects of that development, RÚV reports. Price increases are not expected to slow in Iceland in the coming months, according to Andrés Magnússon, CEO of the Icelandic Federation of Trade and Services (Icelandic: SÞV). Andrés says the Central Bank of Iceland has no tools at its disposal to combat rising prices.

“We have not seen such increases during peacetime, those are the facts. All indexes, all commodity indices confirm it. No one would think that companies, whether large or small, in whatever form, could take this on [alone],” Andrés stated. “When there is such a large increase in the purchase price, it affects pricing, that’s nothing new.” He says the timing is particularly unfortunate in Iceland, as collective agreement negotiations are approaching.

“The government must be concerned about this. We must draw attention to the fact that the government has already come to the aid of farmers, because fertiliser prices are doubling, apparently, and has given farmers a grant of ISK 700 million [$5.4 million, €4.9 million]. It will be interesting to see whether the government intends to come to the aid of the entire public, which will inevitably be affected by this.”

Housing market impacts inflation

Andrés says the Central Bank of Iceland has no tools to tackle so-called “imported inflation,” when the price of imports increases. “This is a situation we have no control over here [in Iceland] and the Central Bank has no tools or equipment in its arsenal to respond. So in that sense it’s entirely new, dealing with what we call imported inflation.”

Social-Democratic Alliance MP Kristrún Frostadóttir stated that rising prices on the housing market played a big part in driving up inflation. “The largest part of the inflation that is above the inflation target is due to rising housing prices in these incredible times,” Krístrún stated, adding that the government could do more to address the issue. “A 17% increase in housing prices in one year is not normal and we are seeing this spread to other areas now. Now there is talk that domestic inflation is starting to pick up, why do you think that is? It’s because housing is the largest single item in individual accounting.”

Upwards of 140% Difference on Food Prices Throughout Country

Food prices vary as much as 140% depending on where in Iceland you’re doing your grocery shopping. This per a recent price survey conducted by the Icelandic Confederation of Labour (ÁSI).

ÁSI compared prices on 103 products sold at fifteen small grocers in rural areas. Fifty-six of the 103 surveyed products had a price difference of 60 – 140% between the highest and lowest listed prices on specific items. Twelve products had a difference of over 140%. This is especially concerning because many of the shops surveyed are located in isolated locations and are the only viable option for people living in the area.

As one example of a significant price difference, a package of standard, sliced sandwich cheese (brauðóstur) had an ISK 1,373 [$10.07; €8.52] or 106% difference between the highest and lowest surveyed price per kilo. The price of a box of Cheerios varied ISK 1,183 [$8.68; €7.34], or 103%. There was a 100% difference, or ISK 1,597 [$11.72; €9.91], between the highest and lowest surveyed per-kilo prices of veal. Butter varied 50% in listed prices, different kinds of bread 60 – 70%, coffee pads 80%, and clothes detergent 156%.

Looking at broader categories, there was between 80 – 100% difference between the highest and lowest prices on meat and fish, around 100% difference on canned and dry goods, and 80 – 100% difference on prices of snacks, sodas, and other beverages. The largest price difference was generally found among fresh vegetables, which averaged a difference of 200 – 300%.

Product selection also varied significantly from shop to shop. The largest selection (94 out of 103 products) was found at Skagafirðingabúð in Skagafjörður, North Iceland; the smallest (24 of 103 products) at Versluninn Ásbyrgi in Northeast Iceland.

Small, independent grocers fighting to stay in the black

For a merchant’s perspective on the price variances, RÚV spoke to Jón Stefán Ingólfsson who has run Jónasbúð in Grenivík, North Iceland, for 25 years. He agreed that 140% was a bit much in terms of a price difference, but said there could be a number of reasons for this. He said the survey included small, privately owned shops in small towns, as well as shops that are part of larger grocery chains. The chain stores can buy their goods at wholesale prices, he explained, which means they can offer lower prices to their customers than the owners of private grocers.

Jón Stefán says he thinks it unlikely that the shops charging higher prices are attempting to gouge their customers, as most small businesses are constantly fighting to stay in the black.

See ÁSI’s full table of price comparison results and shops surveyed (in Icelandic) here.

Price Increases at Village Grocer Angers Community

A large proportion of the residents of Dalabyggð, a municipality in West Iceland have added their name to a list of people unhappy that the Krambúð grocery chain has taken over the local shop in the village of Búðardalur and immediately raised prices. RÚV reports that many have stopped shopping in the village in protest.

Búðardalur has a population of 254 and is the main administrative and service centre in the municipality, with a petrol station, restaurant, coffee shop, health clinic, vínbúð, tourist information centre, and small grocery. According to a recent survey taken by residents, prices at the grocery have gone up as much as 25% since Krambúð took over the store and as such, they are opting to drive as far as the town of Borganes, some 78 km [48 mi] away, to do their shopping.

According to Baldvin Már Guðmundsson, who collected the residents’ signatures, the change in ownership of the grocery took locals by surprise and it’s had a significant financial impact. “It’s not good for our community here,” he said. Some may raise an eyebrow at the thought of driving two hours roundtrip to do the grocery shopping, but Baldvin Már asserted that in the long run, it’s worth it. “It can really pay off when the price increases are so great on necessities.” And it’s not just locals who are unhappy with the prices, he continued—tourists also find the prices high.

All the locals want now is for the store to return to its original ownership and go back to being a Kjörbúð, a different grocery store chain.

“We were quite happy with Kjörbúðin,” recalled Baldvin Már. “There was a good selection, the prices were okay, and there was no reason to go to Borganes, for example. People were satisfied with the shop and had started coming over from further away and it was all fine and good. Then we had this misfortune.”


Icelandic Skyr Cheaper Abroad Than in Iceland

Ísey brand skyr is cheaper in grocery stores in Finland and Britain than it is in Iceland, Vísir reports. But although some Icelandic consumers are crying foul, the Icelandic dairy cooperative MS Dairies says that there are several perfectly good reasons for this price discrepancy, not least that skyr sold abroad is not actually made in Iceland, but rather produced at a lower cost in Jutland, Denmark and then exported to other countries.

“I can buy Ísey skyr in Finland for 40% cheaper”

Ísey skyr is exported widely and is available throughout Europe, as well as in the United States and Japan. A number of frustrated Icelanders have shared photos on social media of cheaper Ísey shelf prices in other countries.

“Is there any reason that it’s cheaper to buy Icelandic skyr in England than in Iceland?” asked lawyer María Rún Bjarnadóttir in a Facebook post this spring showing 170 grams [5.9 ounces] of skyr for sale at 99 pence—the equivalent of ISK 150 [$1.20; €1.09]. “I bought Rioja red wine for £5 at the same time. But of course we have to have restrictions on competition among dairy products and ban the sale of alcohol in grocery stores in Iceland. Of course.”

Author Þórdís Gísladóttir made a similar observation in Finland earlier this month. “I can buy Ísey skyr in Finland for 40% cheaper than in Iceland,” she tweeted. At €0.99, skyr sold in Finnish grocery stores would come out to roughly ISK 137 [$1.09].

By comparison, the same size tub of skyr sold in Icelandic grocery stores goes for ISK 175 [$1.40; €1.27] at Bónus, ISK 178 [$1.43; €1.29] at Krónan, and ISK 189 [$1.51; €1.37] at Nettó.

Skyr sold abroad “not connected to Icelandic agriculture”

When price comparing, however, Sunna Gunnars Marteinsdóttir, Communications Director for MS Dairies, urges Icelanders to keep in mind that MS sells its products wholesale and that food prices are determined by the free market in Iceland and elsewhere.

Moreover, she said, the skyr sold in the UK and Finland is produced in Denmark and as such is “not connected to Icelandic agriculture” as she said is made out in the aforementioned social media posts.

Sunna also said that although there are price discrepancies, Ísey skyr sold in Iceland and abroad is still all in the same general price range. As an example, she noted that skyr sold in Finland is priced anywhere from ISK 136 [$1.09; €0.98] to ISK 275 [$2.20; €1.99], depending on what kind is purchased. Similarly, she said, skyr sold in Iceland ranges from ISK 125 [$1.00; €0.91] to ISK 309 [$2.48; €2.24] in price.

She also noted that the Icelandic dairy industry is a small one, and necessarily less efficient than larger operations abroad. MS Dairies has an annual turnover of ISK 28 billion [$224 million; €203 million], as compared to other (unspecified) producers that have a turnover equivalent to ISK 500 – 2,000 billion [$4.10 billion – $16.43 billion; €3.62 billion – €16.04 billion].

Other factors to consider

The SA Confederation of Icelandic Enterprise also weighed in, saying that other factors need to be taken into account when making price comparisons. Purchasing power makes a big difference, SA argued, as well as how long Icelanders have to work to pay for monthly groceries.

“According to information from OECD [Organisation for Economic Co-operation and Development], average hourly pay after income tax was 55% higher in Iceland than in Finland and the prices of food and beverages were 30% higher according to information from the EU Statistics Office,” read an SA assessment from the beginning of the year. The assessment concludes that purchasing power in Iceland is 20% higher than it is in Finland.

Based on these figures, it took Icelanders an average of eight hours to earn enough to cover their monthly food costs, versus the 9.5 hours it took Finnish people to buy the same amount of food.

Customs Duties on Imported Potatoes May be Suspended

Customs duties on imported potatoes will be likely be suspended from May 3 until August 11, RÚV reports. The Ministry of Industries and Innovation has temporarily lifted these duties because of a shortage of high-quality domestic potatoes. Iceland’s current potato crop suffered after a wet and cold summer last year.

Local farmers and the Icelandic Federation of Trade have been calling for a suspension of import duties for the last three weeks, saying that that even the Sales Association of Vegetable Farmers (SFG) has supported the idea. But these petitions had been denied by the Ministry of Industries’ Advisory Committee on the Import and Export of Agricultural Products, which said that duties could only be suspended in the event of a shortage of domestic product.

Per the provisions of the laws governing agricultural products, there can only be a suspension of import duties when two leading domestic distributors and two key domestic producers cannot keep up with demand. Since technically, there are enough Icelandic potatoes, the advisory committee said there shouldn’t be a suspension of customs duties. Local retailers were unhappy with this interpretation, saying that it missed the point. “We have plenty of potatoes,” Gréta María Grétarsdóttir, CEO of the Krónan supermarket chain remarked. “But the quality of Icelandic potatoes is not as good as Icelanders are accustomed to…these are not the first-class Icelandic potatoes that Icelanders are used to getting.”

After reevaluating of the situation on Tuesday, the Advisory Committee has reversed its position. The proposed suspension of customs duties was presented to domestic producers, who were given four days to respond. However, according to Ólafur Stephensen, the CEO of The Icelandic Federation of Trade, there are two Icelandic potato farmers who “are holding the potato market hostage,” so whether the suspension will actually go into effect is still an open question.


Price Increases Threatened Pending Approval of Collective Agreements

Several Icelandic food companies have stated that they will increase the prices of their products if pending collective agreements are approved, RÚV reports. The proposed price increases have been harshly criticized by union leaders, while company CEOs claim they will be necessary if there are wage increases and the prices of raw materials go up. Members of trade unions associated with the Federation of General and Special Workers—including Efling, VR, and LÍV—are currently voting on whether or not to approve the terms of the new collective agreements, which would be in effect from April 1, 2019 until November 1, 2022.

Icelandic food wholesaler ÍSAM is perhaps the most prominent entity to announce pending price increases. ÍSAM owns the Icelandic food companies Frón, Kexsmiðjan, Myllan, and Ora, and also imports a wide selection of popular food and foreign home goods brands, such as Always, BKI, Hershey’s, Finn Crisp, Fairy, Pampers, Pfanner, Rynkeby, and others. ÍSAM announced yesterday that there would be a 3.9% increase on all of their local company’s product prices if the collective agreements go into effect. Prices on imported goods would be raised by 1.9%.

Other Icelandic food companies have followed suit. Gæðabakstur, Ömmubakstur, and Kristjánsbakari—all baked goods companies—have stated that they would raise their prices by around 6.2%, effective May 1. According to a statement issued by Gæðabakstur, the price of wheat has risen by 30% due to crop failure, but local wage increases—particularly for those on evening and night shifts—will also have an impact on product prices. The company also points to fluctuating exchange rates, and increases to supplier and transportation costs.

Several companies that provide janitorial or cleaning services have also said that they would increase their prices if the collective agreements are approved.

Flosi Eiríksson, the Managing Director of the Federation of General and Special Workers (SGS), said the announcements came as a “great disappointment,” noting that “it definitively shows a real division within SA [the Confederation of Icelandic Enterprise] in that some of their companies are racing off with these increases while we are voting on the agreements…This is totally contrary to what the SA leaders said when we signed the agreements.”

Speaking of ÍSAM in particular, Ragnar Þór Ingólfsson, chair of the VR union, told RÚV that the company’s attitude poses a real threat to the collective agreements, which specifically stipulate that members’ purchasing power be safeguarded. “I think this is unprecedented—at least as far as I can remember—for a company to proceed with such threats in the middle of voting on the agreements.”

“This is a peculiar stance and approach for [ÍSAM] to be taking,” Ragnar Þór continued, “particularly in that company selling many well-known brands that appeal to consumers. The same people are voting on the collective agreement.”

ÍSAM CEO Hermann Stefánsson contends, however, that the proposed price increases should not be viewed as a threat. On the contrary, he said, ÍSAM is in favour of the collective agreements. Hermann believes that the proposed prices increases are “moderate,” considering the wage increases that are put forth in the collective agreement. “We’ve seen price increases among our competitors that are much higher, higher than what we’re announcing.”

The main terms of the collective agreements can be read in English (and Polish) on Efling’s website. Union members have until Tuesday, April 23 at 4:00 pm to vote on the collective agreements.

Shortage of ‘First Class Icelandic Potatoes’ Say Grocers

The Icelandic Federation of Trade is calling for a suspension of duties on potatoes so that potatoes grown abroad can be imported at an acceptable cost to local consumers. RÚV reports that Iceland’s current potato crop suffered after a wet and cold summer last year. As such, locally-grown potatoes are not up to their usual standard and grocers and produce importers want to see customs duties adjusted accordingly.

“We have plenty of potatoes,” Gréta María Grétarsdóttir, CEO of the Krónan supermarket chain remarked. “But the quality of Icelandic potatoes is not as good as Icelanders are accustomed to…these are not the first class Icelandic potatoes that Icelanders are used to getting.”


Imported potatoes “30% more expensive than they need to be”

Guðmundur Marteinsson, CEO of the Bónus supermarket chain, echoed this sentiment, telling RÚV that he finds it strange that import duties on potatoes have not been waived for the time being, given that even the Sales Association of Vegetable Farmers (SFG) has support the idea.

In an announcement on its website, the Icelandic Federation of Trade stated that the Ministry of Industries and Innovation has not complied with requests from importers to suspend custom duties. The organization says this is to the detriment of consumers because imported potatoes will be more expensive. “It isn’t possible to import potatoes unless the duties are cancelled,” said Guðmundur. “We started complaining three weeks ago.”

“When this situation arises, it often happens that customs duties are lifted,” explained Gréta María. “But not now. As such, foreign potatoes are 30% more expensive than they need to be.”


No Shortage of Potatoes

By law, the Advisory Committee on the Import and Export of Agricultural Products, which is part of the Ministry for Industries, submits proposals to the minister regarding suspensions of custom duties. This happens, for instance, when there is a shortage of a specific agricultural product on the domestic market. Per the provisions of the laws governing agricultural products, this can only happen when two leading distributors and two key producers cannot keep up with demand. The committee says, however, that no such shortage exists. The situation is being closely monitored, they say, and new data on the local potato crop will be obtained on April 23.

“It’s very strange because SFG’s largest retailer has sent a letter to the committee in which it urges for tolls to be cancelled because there are not enough potatoes of an acceptable quality,” said Guðmundur. “There aren’t enough, but there are some. We’re scraping together what we can for the weekend,” he said, referring to the Easter holiday this week. “That’s where we’re at.”

Ólafur Stephensen, the CEO of The Icelandic Federation of Trade, had stronger words for the committee. “Saying that there’s no impending shortage is preposterous,” he wrote in the published announcement. “And it means that importers are losing the precious time it takes to order and bring into the country products that meet consumer demand.”

“Icelanders deserve to be able to eat out at affordable prices”

A Reykjavík restaurant has seen a significant increase in customers since lowering its menu prices by 20%, Fréttablaðið reports. The owner credits this in large part to the fact that more Icelanders are able to afford eating there on a regular basis.

The restaurant Þrír Frakkar, which specializes in classic Icelandic cuisine, opened its doors on March 1, 1989. To celebrate its 30th anniversary, owner and chef Stefán Úlfarsson (who recently took over from his father, Úlfar Eysteinsson) decided to lower menu prices by 30% for the first week of March. The promotion was so successful, however, that he decided to permanently lower prices by 20%.

The subject of high prices at local restaurants and cafes became a hot topic recently when Þórarinn Ævarsson, the CEO of IKEA in Iceland, gave a speech at a conference held by the Icelandic Confederation of Labour in which he criticized “excessive” markups on menus, which has, he argued, led to Icelanders no longer going out to eat.

Chef Stefán told Fréttablaðið that his restaurant held their 30-year anniversary promotion around the time that Þórarinn gave his speech and so the CEO’s theories were very much in his mind at the time. He said that the number of diners at the restaurant in March was significantly higher – sometimes over 30% higher – than usual. Stefán says that by lowering prices and getting more customers, his restaurant maximises all of their resources, be it staff hours and wages, produce turnover, or the operational cost of the building.

Stefán also said that his restaurant has seen a particularly big uptick in the number of Icelandic diners who come in. “Our foreign employees told me that they haven’t seen so many Icelanders in a long time. It has been a huge boon for us.”

“I recommend that people try this and track the results. Icelanders deserve to be able to eat out at affordable prices.”