This is the main shopping street in the city. It started out out as Bankistraeti (Bank Street) and as you go up the hill away from the old town it turned into Laugavegur. Not to be mistaken with Laugavegur, the famous hiking trail from Landmannalaugur to Thorsmork to Skogar, which has become so popular it was named after this street. The shops range from high fashion to dollar stores (Tiger) to fine home furnishings to kitchen gadgets. Georg Jensen is my personal favorite. Stop in a bakery (bakarinn) for a treat (snudur, vinabraud) or at a kiosk for a hot dog. The restaurants at the bottom of the street are good. Don't forget to go up Skolaviordustigur--many nice shops, including the world class record shop 12 Tonar.
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