The reason why there is so little space is because there are supposed to be baggers. I guess they finally got rid of them to save money.
Then there is this side-board across the checkout that you can use to bag your purchase.
What you also see a lot in Germany is people taking empty cardboard boxes from the shelves and use them instead of bags at the checkout. It is quick and convenient.
Seems a bit foreign to my German soul, too.