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.)"
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|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 BENAROYAName: Raphael BenaroyaTitle: Chairman of the Board
| |                                                                         
| | /s/KENNETH P. CARROLLKenneth P. Carroll                                 

KPC amend no. 4KPC:jmt