Antonio Conte admits Chelsea can no longer compete with Manchester City and Manchester United in the transfer market, insisting his side simply could not afford to challenge their rivals for Alexis Sanchez.

On Monday [22 January], United completed the signing of the Chile international from Arsenal after City last week dropped out of the running for his signature. Sanchez is believed to be on a basic salary of £300,000-per-week at Old Trafford, making him the club's highest earner along with Zlatan Ibrahimovic.

While United did not part with a transfer fee for the player with Henrikh Mkhitaryan joining the Gunners in a straight swap deal – the club have spent £290m on new players since Jose Mourinho's arrival at the helm. Across the city at the Etihad Stadium that figure is even bigger, with Pep Guardiola sanctioning £365m worth of signings in the same period of time.

Chelsea have spent a similar figure in that period under Conte, but that number has been offset by a number of high profile sales including Diego Costa (£57m), Oscar (£55m) and Nemanja Matic (£40m).

And when it comes to matching salary demands, Conte feels his side and Arsenal, who they meet in the Carabao Cup semi-final second-leg on Wednesday [24 January], are falling behind their rivals in the north.

"In this moment, there are two teams in this league who are 'top'," Conte said. "The others have to fight for a place in the Champions League. Last season we did a fantastic job and did a little miracle. This season is showing this.

"We won the league and reached the FA Cup final, and finished with a profit of £50m in the transfer market. In the past, this had never happened but the situation changed. What happened three years, 10 years or eight years ago was totally different. Now we have to fight and give our all for Chelsea because United and Manchester City will stay there. We'll have to make a success not with money but with work."

Chelsea have already signed Ross Barkley this month for £15m and are hoping to clinch a double deal to bring AS Roma duo Emerson Palmieri and Edin Dzeko the club for a combined fee of £45m.

Antonio Conte Alexis Sanchez
Conte says his side were never in the race for Sanchez. Getty