 Founded in 1959 by Pálmi Jónsson (1923–91) in an old barn as a mail-order company, it found success as a cheaper choice than most other retailers in Reykjavík.The company soon expanded and opened up its first store in the barn.In 1967 Hagkaup opened the first supermarket in Iceland in an old warehouse in Skeifan, Reykjavík, which continues to enjoy great popularity among its customers to this day.