Shopping Guide in Iceland: From Handknit Sweaters to Local Design

Shopping in Iceland is less about global chains and more about discovering authentic, locally made products that reflect the island’s culture and creativity. From handknit lopapeysa sweaters to volcanic jewelry, Iceland offers unique souvenirs and gifts you won’t find anywhere else. This guide explores the best things to buy, where to shop, and practical tips for making the most of your shopping experience in the Land of Fire and Ice.

Introduction: Shopping in Iceland

Iceland’s shopping culture is built around small businesses, artisan workshops, and local designers. Reykjavík, the capital, is the hub for boutiques, craft stores, and flea markets, while smaller towns feature cozy shops selling regional specialties. Prices are higher than in many destinations, but quality is exceptional, and purchases often support local artisans and sustainable practices.

Whether you’re looking for a traditional wool sweater, a taste of Icelandic chocolate, or modern Nordic design, shopping here connects you with the island’s identity. For seasonal experiences, consider timing your visit with a cultural fair or food festival—see our Festivals & Events in Iceland guide for inspiration.

Icelandic Wool & Lopapeysa Sweaters

The most iconic Icelandic souvenir is the lopapeysa, a handknit wool sweater characterized by circular yoke patterns. Made from Icelandic sheep’s dual-layered wool, lopi yarn provides warmth, breathability, and water resistance—ideal for Iceland’s climate.

Authentic sweaters are handmade and sold in shops, cooperatives, and even directly from knitters. Each pattern is unique, and colors often reflect Icelandic landscapes. While machine-made versions exist, handmade lopapeysur are heirloom-quality pieces worth the investment. Hats, mittens, scarves, and blankets are also popular woolen items.

Design & Handicrafts

Iceland’s creative spirit shines in its design scene. Boutiques across Reykjavík showcase furniture, ceramics, and jewelry that merge tradition with modern aesthetics. Popular items include:

• Volcanic Jewelry: Necklaces and rings made with lava rock or volcanic ash.
• Ceramics: Minimalist pottery inspired by Iceland’s colors and textures.
• Home Decor: Cushions, throws, and wall art created by local designers.

DesignMarch, held every spring, highlights new work by Icelandic designers. Even if you miss the event, many boutiques carry unique pieces that make stylish and meaningful souvenirs.

Food & Drink Souvenirs

Edible souvenirs capture Iceland’s flavors. Some favorites include:

• Skyr: A thick, yogurt-like dairy product, widely available in supermarkets. While perishable, powdered or shelf-stable versions can be taken home.
• Chocolate: Icelandic brands like Omnom produce innovative bars featuring local ingredients like sea salt and licorice.
• Lakkrís (Licorice): Beloved by Icelanders, often combined with chocolate.
• Craft Beer: Breweries like Einstök offer bottles or cans to take home.
• Reyka Vodka & Brennivín: Distilled locally with pure water and geothermal energy.

Food souvenirs are both delicious and practical gifts. For deeper culinary insight, see our Food & Drink in Iceland guide.

Music, Books & Culture

Iceland’s cultural exports make excellent mementos. Reykjavík’s record stores stock music by Björk, Sigur Rós, and local indie bands. Vinyl culture thrives, and limited-edition releases are common.

Bookstores highlight Iceland’s rich literary heritage. You’ll find translations of the Icelandic sagas, modern novels by authors like Halldór Laxness, and collections of folklore. These items provide lasting reminders of the country’s storytelling traditions.

Markets & Boutiques in Reykjavík

Reykjavík is Iceland’s shopping hub. Key areas include:

• Laugavegur Street: The city’s main shopping street, lined with boutiques, outdoor gear stores, and design shops.
• Kolaportið Flea Market: Open on weekends, offering everything from vintage clothing and secondhand books to fresh fish and handmade crafts.
• Downtown Boutiques: Shops selling everything from contemporary Icelandic fashion to quirky souvenirs.

Exploring Reykjavík’s boutiques is an adventure itself—each store offers a glimpse into Iceland’s modern creative scene.

Shopping Beyond Reykjavík

Outside the capital, shopping becomes more personal and community-driven. In Akureyri, the “Capital of the North,” visitors find small design shops, bookstores, and craft stores. Coastal villages often sell handmade goods directly from artisans, such as knitwear, ceramics, and photography prints.

Farmers’ markets and seasonal fairs feature local produce, jams, and smoked fish. These markets are excellent opportunities to connect with locals while purchasing unique items. Supporting regional artisans also contributes to Iceland’s sustainable economy. Learn more in our Sustainable Tourism in Iceland page.

Practical Tips for Shopping in Iceland

• Prices: Expect higher costs than in many countries, especially for handmade goods. Focus on quality over quantity.
• Tax-Free Shopping: Non-EU visitors can claim VAT refunds on purchases over a set minimum (usually ISK 6,000). Ask for tax-free receipts at checkout.
• Payment: Credit and debit cards are accepted everywhere, even for small purchases. Cash is rarely needed.
• Sustainability: Choose local, handmade, or eco-certified products to support Icelandic communities and reduce your footprint.
• Authenticity: Check labels to ensure items like lopapeysa sweaters are handmade in Iceland, not mass-produced abroad.

Conclusion

Shopping in Iceland is more than a transaction—it’s a cultural journey. From wool sweaters that carry centuries of tradition to modern design pieces that reflect creativity, every purchase tells a story. Whether browsing Reykjavík’s boutiques, exploring flea markets, or picking up food and drink souvenirs, shopping here connects travelers to Iceland’s heart. Invest in quality, support local artisans, and take home a piece of Iceland that lasts long after your journey ends.