Locals in Iceland like to meet for a coffee and a chat. They also don’t mind having a drink or two in an evening. Hence, the centre of Reykjavik is well supplied with cafes and bars. The main shopping street is Laugavegur and you can’t go very far without hitting one of the excellent, usually quirky cafes or bars.
Make sure you look up and down the cross-streets as you go, not because the cars pose any threat – Icelanders are astoundingly courteous to pedestrians – but because looking up the hill you will often catch a glimpse of the beautiful Hallgrimskirkja, the fabulous church perched on top of the hill, which can be seen from all over the city. Looking the other way, down the hill, you see the sea and, when it’s not raining, snowing or hailing, you can see across the water to rugged snow capped peaks.
If it is raining, snowing or hailing, as I’m afraid Iceland is wont to do, then even more reason to take refuge in a café or bar. Sandholt Bakari is a personal favorite – oh the cakes and pastries! Another good place is the bookshop up the hill between Laugavegur and the church; Eymundsson has English language books as well as Icelandic, with lots of Icelandic fiction in translation, plus books of Icelandic history, photos and the famous sagas.
Bars tend to fill up later in the evening and many often have music: live or DJed. Boston is a recommendation of mine. If you feel like grabbing a bottle of wine to have a quiet night in be warned – the licensing laws in Iceland are quite strict and alcohol is only sold in specialized stores with quite limited hours; for example, they are closed on Sundays.