Exhibit No. 10.1
                                                           ----------------




                  AMENDMENT NO. 2 TO EMPLOYMENT AGREEMENT


         This AMENDMENT NO. 2 made as of the 29th day of November, 2001, to
the Employment Agreement made as of the 20th day of November, 1998 (the
"Agreement"), between UNITED RETAIL GROUP, INC., a Delaware corporation,
with principal offices at 365 West Passaic Street, Rochelle Park, New
Jersey 07662-6563, and RAPHAEL BENAROYA, residing at 179 Lincoln Street,
Englewood, NJ 07631.

         WHEREAS, the Executive has been employed by the Company as its
Chairman of the Board, President and Chief Executive Officer;

         WHEREAS, the Company desires to continue the 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 November 28,
2001 and approved by the Company's Board of Directors on November 29, 2001
with the Executive abstaining.

         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(u) of the Agreement is amended to read in its entirety as follows:

                  "(u) Term of Employment shall mean the period of time
                  commencing on November 20, 1998 and ending on July 30,
                  2006 or such later date as may be mutually agreed upon by
                  the Company and the Executive."

2.  Section 4(b) of the Agreement is amended to read in its entirety as follows:

                  "(b) The Executive shall continue to be eligible to
                  receive, and the Company shall continue to pay, a
                  semi-annual cash incentive compensation payment
                  ("Performance Bonus") based on the Company's consolidated
                  operating income for the six-month periods ending January
                  31st and July 31st, respectively. The Executive's
                  participation percentage shall be 60% with a semi-annual
                  award ranging from zero to 120% of Base Salary for the
                  six-month period in accordance with the Summary Plan
                  Description for United Retail Group, Inc. Incentive
                  Compensation Program for Executives as of August 4, 2001,
                  provided, however, that the Performance Bonus shall be
                  earned and fully vested in the Executive as of January
                  31st or July 31st, as the case may be, whether or not the
                  Executive shall remain in the Company's employ after the
                  Performance Bonus shall have vested and provided,
                  further, that the Performance Bonus shall be paid to the
                  Executive as soon as practicable after the consolidated
                  operating income for the period in question shall be
                  determined."

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

         IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement in Rochelle Park, New Jersey, in duplicate originals on November
30, 2001.

                                        UNITED RETAIL GROUP, INC.

                                        By:  GEORGE R. REMETA
                                             ----------------------------------
                                        Name:  George R. Remeta
                                        Title: Chief Administrative Officer

                                        RAPHAEL BENAROYA
                                        Raphael Benaroya

RB Amend No 2
KPC:jw