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The main shopping downtown is on and around Austurstræti, Aðalstræti, Hafnarstræti, Hverfisgata, Bankastræti, Laugavegur, and Skólavörðustígur.
One look at Litla Jólabúðin and you'll know what it's all about: Christmas. The shop is open year-round despite its seasonality, selling ornaments and other wintertime trinkets. Chances are you'll learn a thing or two about Icelandic holiday culture while you're in there.
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