Why Are There No McDonald's Restaurants in Iceland?

Iceland has changed a lot, especially since the end of the 1980s. People say it used to resemble Eastern Europe much more than Scandinavia. There was little political meddling; prices were either too high or wages were too low and never both. This also started to change in the late 1990s. Until 2000, tourism virtually didn’t exist.

Generally speaking, Iceland has always been one of the nation’s most resistant to giant corporations and the globally familiar footprint of capitalism. It’s also not the easiest or cheapest place to set up a chain if you are a foreign brand, due to the isolated nature of the island and the harshness of conditions surrounding it. By now travel and trade routes are much more accessible, but Iceland remains one of the least globalised nations, certainly in Europe.

There was one McDonald’s restaurant in the capital, Reykjavik, which opened in 1993 and did cause enough of a stir that then Prime Minister, Davíð Oddsson, became the first person in Iceland to order a Big Mac.

After the financial crash of 2008, Iceland was thrust into its own economic crisis, which lasted a number of years and drove the local currency, the Icelandic krona, to lose value. This was disastrous for the Reykjavik branch of McDonald’s which, unlike most of its competitors in the city, relied heavily on imported produce. As tariffs spiked on imported goods, it became financially nonsensical to bring in vast swathes of extremely expensive meat, onions and pretty much any other ingredient you can picture in your McDonald’s order.

The branch would have had to raise prices far above local competitors, who largely used locally sourced produce, and so in late 2009 the only McDonald’s in Iceland closed down. This did cause a brief spike in sales, as Icelanders rushed to grab what might be the last Big Mac they’d ever eat!

That said, McDonald’s never really established any sense of dominance in Iceland. The national burger chain, Hambórgarabúllan, was so popular that people basically boycotted its foreign equivalent. Today there are a number of great places to get a burger in Iceland. Check out this guide to the best burger joints in Reykjavik.

Not only is there no McDonald’s food but there are also no casinos and no army. However, Taco Bell, Kentucky Fried Chicken, and TGIF’s have managed to stay, somehow. This is only one example of Iceland’s oddities. Consider that beer was banned in Iceland until 1989. And that until the early 1980s, there was no television on Thursdays nor during the whole month of July, because the government thought everyone should do something besides watch television during this time.

Looking for the best bite to eat in Reykjavik? Book your spot on one of these food tours in Iceland to taste dishes far more authentic and delicious than anything you’d find in McDonald’s.