Exhibit No. 10.3

AMENDMENT NO. 4 TO EMPLOYMENT AGREEMENT

This AMENDMENT NO. 4 made as of the 2nd day of September, 2003, to the
Employment Agreement (as amended, the “Agreement”) made as of the 20th day of
November, 1998, between UNITED RETAIL GROUP, INC., a Delaware corporation, with
principal offices at 365 West Passaic Street, Rochelle Park, New Jersey
07662-6563, and KENNETH P. CARROLL, residing at 140 Prospect Avenue, Apartment
11J, Hackensack, New Jersey 07601.

WHEREAS, capitalized terms used herein and defined in the Agreement shall have
the same meaning as in the Agreement;

WHEREAS, the Executive is an attorney admitted to practice before the courts of
the State of New York and the United States District Court for the Southern
District of New York;

WHEREAS, the Executive has been employed by the Company as its Senior Vice
President — General Counsel to provide, among other things, advice on the laws
of the State of New York and the federal laws of the United States and to
supervise the representation before courts and legislative and administrative
bodies of the Company and its subsidiaries;

WHEREAS, the Company desires to continue the professional services of the
Executive, and the Executive desires to continue to provide such services to the
Company, on the terms set forth in the Agreement; and

WHEREAS, the provisions of this Amendment were recommended by the Compensation
Committee of the Company’s Board of Directors on August 28, 2003, and approved
by the Company’s Board of Directors on August 29, 2003.

NOW, THEREFORE, in consideration of the mutual covenants and obligations
hereinafter set forth, the parties hereto, intending to be legally bound, hereby
agree as follows:

1. Section 1(s) of the Agreement is amended to read in its entirety as follows:

    “(s) Term of Employment shall mean the period of time commencing on November
20, 1998 and ending on July 30, 2008 or such later date as may be mutually
agreed upon by the Board of Directors and the Executive. (For the avoidance of
doubt, Term of Employment as used herein may extend beyond the termination of
the Executive’s employment.)"

2. Section 15(a) of the Agreement is amended to read in its entirety, as
follows:

    “(a) The Company shall indemnify the Executive as provided in the By-laws as
in effect on August 29, 2003.”

3. All the other provisions of the Agreement shall remain in force unchanged.

IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment in
Rochelle Park, New Jersey, in duplicate originals on September 2, 2003.

  UNITED RETAIL GROUP,INC.   By:/s/RAPHAEL BENAROYA
Name: Raphael Benaroya
Title: Chairman of the Board       /s/KENNETH P. CARROLL
Kenneth P. Carroll

KPC amend no. 4
KPC:jmt