The Gunners were beaten 2-1 at the Emirates on Sunday afternoon.
The Gunners dominated for large periods in Sunday’s clash at the Emirates, creating several big chances but failing to take the lead in the game.
Instead they found themselves 1-0 down just after the break as Troy Deeney was allowed to head on a throw in to Odion Ighalo, who spun defender Gabriel to fire his side into the lead.
It was a highly frustrating moment for Arsene Wenger’s side and Claridge says it was Arsenal in a nutshell.
"The ball was thrown in, it was a cheap header and Ighalo rolled Gabriel but it all stemmed from shocking, really poor defending from Arsenal,” he told BBC Sport.
"They have worked so hard and missed the opportunities. Watford get one opportunity and score, and that is Arsenal in a nut shell.
"This is a huge story. What looked like, six weeks ago, that it was going to be a fantastic season for Arsenal, you are back to the same old, same old story.”
The pressure is now sure to increase against Arsenal manager Arsene Wenger this season following this latest defeat.
The Premier League title is now looking increasingly difficult to win, with the Gunners eight points behind leaders Leicester City with just eight games remaining.
The FA Cup was very much their back-up option, but with that now off the table as well as progression in the Champions League looking extremely unlikely this campaign has become an increasingly poor one from the Gunners.