The 'Gunners' were held to a 1-1 draw with Southampton at St Mary's on Sunday and required a late goal from Olivier Giroud to earn them a share of the spoils.
Speaking on 'BT Sport', for whom the former Blackburn striker works as a pundit, Sutton admitted that whilst a point isn't a disaster given the way the game went, it means Arsenal won't come close to the league title once again this season.
'Scoring late you'd say it is a good point at that stage but before the game in context Arsenal would have looked at this and thought it was a must-win game,' Sutton explained.
'Their title hopes have absolutely gone and it's a fight for the top four now.'
Meanwhile, Sutton, a former Premier League winner himself, questioned Arsene Wenger's decision to field a back-three of Laurent Koscielny, Nacho Monreal and Per Mertesacker, saying that it lacks the requisite quality to mount a Premier League challenge.
'Can Arsenal win a title with that back line? We all know the answer. Absolutely not and it is as simple as that,' Sutton ranted. 'How can Arsene Wenger not see that?'
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