Sanchez scored 24 Premier League goals for the Gunners last term when he was often used as the team's main striker, but the summer signing of Alexandre Lacazette has seen him revert to a deeper role.
The Chile international has only four goals to his name this term as a result, and Wenger believes that he is dropping too deep in search of the ball.
"I think he struggles a bit at the moment to score as much as last year but last year he played much more at centre-forward," Wenger told reporters.
"This year I believe in games like Southampton he came a bit too deep. We play against teams that play very, very deep and I feel he loves to touch the ball so when he doesn't get it as much as he wants he comes deep, but when you come deep you can't score.
"It is as simple as that so maybe he has to find a better balance in his positional play."
Sanchez, who is out of contract at the end of the season, lost possession more times in the recent matches against Manchester United and Southampton than any of his teammates have in any other game this season.