Chelsea manager Mauricio Pochettino said his side needs strengthening in the transfer market after a 2-0 defeat at Everton on Sunday, despite the club spending £1 billion ($1.3 billion) on new players over the past 18 months.

A third consecutive win lifted Everton four points clear of the relegation zone as the Toffees continue to shrug off a 10-point deduction for breaches of financial rules.

Abdoulaye Doucoure opened the scoring before Lewis Dobbin's first Everton goal imposed another damaging defeat on Pochettino.

Without the penalty for breaching financial rules, which Everton are appealing, Sean Dyche's men would be four points above Chelsea in mid-table.

A seventh defeat in 16 league games in charge for Pochettino sees Chelsea slip into the bottom half, behind West London neighbours Fulham.

"We need to analyze the reality. We need to talk and try to improve in the next transfer market," said Pochettino.

It was a familiar story for Pochettino as Chelsea dominated the game but failed to make it count.

For the third time this season Chelsea lost despite enjoying over 70 percent possession.

"Football is about scoring goals and we were not clinical in front of goal," added the former Tottenham boss.

Pochettino has pleaded for patience as he tries to mold together an array of expensive young talent.

But Chelsea managers do not tend to get much time to turn things around and the pressure is on the Argentine to find a quick fix to his side's problems.

Pochettino shuffled his pack after a dreadful display in losing 2-1 at Manchester United in midweek.

Chelsea was able to welcome back Conor Gallagher from suspension, while captain Reece James, Benoit Badiashile, and Armando Broja came in as Pochettino made four changes.