Arsenal lose top spot as they fail to trouble Schalke

Whatever it was Peter Hill-Wood was saying to Stan Kroenke in the Arsenal directors' box last night, you can only assume he exlained that these kind of defeats are not commonplace even for a side as erratic as the one that calls the Emirates home.

Not since September 2003 have Arsenal lost at home in the Champions League to foreign opposition, back when home was Highbury and the team itself was on their way to the club's most recent Premier League title the following May. Things have changed since then but what was worryingly new for Arsène Wenger last night was the extent to which his team were scarcely in this game.

They were bossed for most of it by an exceptional performance from Schalke, the Bundesliga's third-placed side last season and an expansive, energetic side in the mould of Arsenal in the good old days. From Klaas-Jan Huntelaar's confident finish to the running of Jefferson Farfan and Lewis Holtby this was a confident, promising performance – everything that Arsenal were not. By the time they went two down to Ibrahim Afellay's goal with five minutes left, Wenger's team had barely created a chance. Gervinho had endured one of his worst evenings in an Arsenal shirt and Aaron Ramsey and Lucas Podolski had been huge disappointments.

Schalke lead Group B by a point and the two sides face each other again in Gelsenkirchen on 6 November. The win for Olympiakos in Montpellier last night played in Arsenal's favour but they have now lost three of their last five games.

It began with the Germans dominating, pressing Arsenal very high up the pitch, no-one more so than Lewis Holtby, the Germany international with the English father. Holtby operated just behind the attacking two of Jefferson Farfan and Klaas-Jan Huntelaar. In midfield, Roman Neustadter worked just in front of the Schalke back four and hit the occasional searching ball. Schalke looked a very decent side. They thought they might have a penalty on 14 minutes when Vita Mannone lunged at the feet of Ibrahim Afellay and did not get the ball. The Dutch winger was booked for diving, a brave decision by the Swedish referee.

There were few chances for Arsenal. Gervinho broke away but was caught rather too easily. Santi Cazorla had a shot deflected wide.

There was a chance for Ramsey at the start of the second half, albeit not much of one, after Cazorla had a shot blocked. It stood out because Arsenal were creating so little.

Before Arsenal did concede, Gervinho was rightly booked for a pathetic dive after a non-contact challenge. When finally he was replaced by Olivier Giroud there was a roar of relief. Almost immediately, Schalke scored. Uchida's cross from the right was deflected into the air and Schalke won two headers, before the ball fell to Huntelaar who finished as Arsenal wish Giroud and Gervinho would.

Afellay killed the game with a second from Farfan's cross with five minutes to go and Arsenal were left facing the wrath of their supporters. They have seen defeats like this too often but never this early in the competition.