Unai Emery’s side, who have raised their game for the big occasion of late, secured derby spoils when beating their London rivals 2-0 at Emirates Stadium last time out.
That result has seen them close to within three points of the Blues and the final Champions League spot.
Forcing their way into that pack is considered to be a priority, having seen Arsene Wenger’s reign end with failures in successive seasons, while they are also still in the hunt for a continental prize.
Arsenal have reached the last 32 of the Europa League, where they will face BATE, and Merson believes an enforced narrowing of the focus on that competition would have aided the Gunners’ cause for 2019.
He told Sky Sports: “It would've done Arsenal a favour to get beat the other day, I think, and then they could have put all their eggs into the Europa League.
“Now they've got to go for the league too but I just don't think they're good enough.
“They're hot and cold, you've got to be consistent. One minute they're getting well-beaten by West Ham, but then they're well-beating Chelsea. The manager's got to be scratching his head.
“This is Arsenal, they need to be playing Champions League football, not Thursday night.
“I think Chelsea will edge it, but only just. It's more the three-point headstart if I'm being honest.”
Merson added on the inconsistency which could work against Arsenal, with Manchester United also in the top-four picture after enjoying a resurgence under Ole Gunnar Solskjaer: “Arsenal will get beaten by a team in the bottom half next week probably, they were getting beaten by West Ham last week and they were very poor.
“They won't have the consistency, I think Manchester United will get found out - they can't keep on being that lucky, and I say lucky but they're poor at the back.
“Tottenham's games they've got without [Harry] Kane are winnable, so I don't see a problem with them, the top two will look after themselves and I think Chelsea will get it.
“Man for man they're a lot better than Arsenal I think. Defensively, they'll be more reliable before the end of the season.
“Manchester United have got a couple of nice games coming up, they've had some nice games, but I'm a great believer that what follows easy games is difficult games. What about when PSG get hold of them?”
Arsenal’s next game is set to see them take on United, with a heavyweight FA Cup fourth round clash to be staged at Emirates Stadium on Friday.