🔴 Introduction
McDonald’s operates in more than 100 countries with over 38,000 locations. Yet, if you travel to Iceland, one of the world’s most developed countries, you won’t find a single golden arch.
McDonald’s arrived in Iceland in 1993 with massive fanfare, but closed all outlets by the end of 2009. This case study explores why one of the most successful global fast food brands couldn’t survive in Iceland, and how economic collapse, global supply chain rigidity, and local preferences played a role.
🎉A Grand Opening in 1993
McDonald’s entered Iceland during a period of economic liberalization and globalization.
- Iceland’s Prime Minister at the time, David Oddsson, bought the country’s first Big Mac at the grand opening
- The first store opened in Reykjavík
- 🧍♂️“I have never ever in my life seen such an opening in one restaurant. There were lines for days outside the restaurant and they were selling thousands and thousands of burgers every day.”
- Initially, McDonald’s sourced meat locally but later shifted to imports due to shortages and strict corporate sourcing rules
📉 The 2008 Financial Crisis Changed Everything
💥 Iceland’s Economy Collapsed
- All three of Iceland’s major banks failed
- The Icelandic króna lost roughly 50% of its value against the euro in a matter of months
- Higher tariffs translated into higher import costs
- McDonald’s imported ingredients from Germany, including meat, potatoes, and packaging
McDonald's Icelandic Franchise owner Jon Gardar Ogmundsson described the situation:
“For a kilo of onion, imported from Germany, I'm paying the equivalent of a bottle of good whiskey.”
McDonald’s refusal to adjust its supply chain meant local ingredients weren’t an option. This inflexibility became the brand’s downfall.
💸🍔 The World’s Most Expensive Big Mac
Due to soaring costs and the collapsing króna, prices ballooned:
-
A Big Mac meal was projected to cost $6.36 USD or roughly 650 krónur
(equivalent to
over $11 when adjusted for inflation to 2025), potentially making it the most expensive Big Mac in the world in 2009.
- 🧾 Franchisees said they would have had to raise prices by 20% just to break even.
“We would have had to raise the price by 20 to 30 percent, which would have made the product too expensive for our customers.” — Franchise owner Jon Ogmundsson
Even though McDonald’s was reportedly serving 10,000–15,000 customers daily in its final week, profits hit record lows.
📅 On October 31, 2009, all three McDonald’s locations in Iceland officially shut down permanently.
"Never been busy before... but at the same time profits have never been lower" — McDonald's Icelandic Franchise owner Jon Gardar Ogmundsson
🧊 The Famous Preserved Burger
On the last day of operations, a man named Hjörtur Smárason bought a McDonald’s burger and fries but never ate them. Instead, he stored the meal in a plastic bag.
Years later, the burger appeared almost perfectly preserved, sparking viral curiosity and becoming a cultural artifact.
📍 As of 2025, it’s displayed at Snotra House in Þykkvibær, South Iceland.
Though often misunderstood, the preservation is due to low moisture, high salt, and quick drying — not artificial chemicals.
🔄 What Replaced McDonald’s?
After the shutdown, McDonald's local franchise firm Lyst launched a new chain: Metro.
- Metro used locally sourced ingredients to lower costs
- Metro briefly thrived, but then filed for bankruptcy in 2010
- Meanwhile, KFC, which already used local ingredients, survived the crisis and continues to thrive today
📈 Iceland’s High Cost of Living
Even after the crisis, Iceland remained one of the most expensive places to eat:
- In 2018, Iceland was the second most expensive country in the world
- A typical sit-down meal: $20–$40 USD
- Fast food chains that succeeded did so by keeping prices reasonable and sourcing ingredients locally
“Keeping prices consistent is the key to surviving in lceland." — Icelandic fast-food owners
🍕🌍 Fast Food in Iceland Today (2025)
- KFC, Domino’s, and Subway all still operate successfully
- Starbucks opened its first location in Reykjavik in June 2025
- Local chains like Tommi’s Burger Joint (Hamborgarabúllan) and Aktu Taktu dominate the burger scene
❓ Will McDonald’s Return?
As of July 2025, there are no confirmed plans for McDonald’s to reopen in Iceland. However:
- Iceland’s economy has recovered
- Tourism has more than quadrupled since 2010
- Young Icelanders now spend $220 USD/month on fast food
- Industry observers suggest McDonald’s could return if it adapts to the local market and economic conditions
🧠 Key Takeaways
🔹 Adaptability is crucial:
Chains like KFC succeeded because they localized their supply chain.
🔹 Rigid global standards can be a liability:
McDonald’s strict import rules proved unsustainable in an economic crisis.
🔹 Popularity doesn’t guarantee profit:
McDonald’s saw record customer traffic but also record-low profits before exiting.
🔹 Brand symbolism matters:
For Iceland, McDonald’s was a symbol of globalization. Its departure was equally symbolic.
🔹 Cultural flexibility wins:
Tommi’s Burger Joint thrived because it prioritized local ingredients and identity.
✅Conclusion
One of the very few countries where McDonald’s could not survive against firm customer pressure is Iceland. The culprits were not cultural rebelliousness but economic collapse, import dependence, and inflexible corporate ideology.
The conclusion? Iceland was the lone country where the Big Mac nearly cost more than anywhere else on the globe and the final burger cultural relic.
Nowadays, hometown establishments, multinational chains like KFC, and Iceland's surging tourist economy make for a busy fast-food scene. And while the golden arches one day will surely land on Icelandic shores, Icelanders for the time being are content with the frozen burger immortalized behind a display case of glass — not a McDonald’s to be seen.