"The food here is cheap."
Translation:Maten her er billig.
I think you are right about the V2 word order. https://en.wikipedia.org/wiki/V2_word_order You must remember though that V2 word order does not mean that the verb is the second word. It is in the second position. So, you could have "The big black and white cat" as a subject with all its modifiers in 1st position.
Maybe "The food here" means "this place's food" which means that "here" modifies "the food" and is part of the first position.
This would also explain why sabu16's sentence above would be a completely different sentence in which "here" is truly used as an adverb instead of describing a noun.