Arsenal were beaten 3-2 by Manchester United in their most recent match.
Arsenal are now five points behind Leicester City, who sit at the top of the league, and they are still trailing Tottenham Hotspur.
To make matters worse, United beat Arsenal despite having a number of injuries to key players.
The Red Devils were forced to field an inexperienced line-up, yet they still looked like the dominant side throughout.
Premier League debutant Marcus Rashford scored twice for Louis van Gaal’s men, and Ander Herrera notched from outside the box to seal the three points.
And Merson feels that Arsenal became complacent ahead of the match, as they felt they were up against a weakened line-up.
"Arsenal had 12 cup finals to play," Merson added.
"But they went out on Sunday with an attitude of 'it's only Man United and they've got loads of injuries and kids playing, so we'll breeze through this game’.
"It just frustrates me and it absolutely does my head in.
"People point to the players, but the manager has to get the players up for these games. Man United might be fifth and not having a good season, but it's still Man United in front of 75,000 people.”
Arsenal now have plenty of work to do if they are to catch up with Leicester or Tottenham.
The Gunners' next match comes against Swansea City on Wednesday, before they face Spurs in a crucial North London Derby at the weekend.