Retreating from a room battle will leave your heroes in the hallway that they used to enter the battle room.
In practice, the amount can be much higher due to stress modifiers like torchlight, death's door, or being underleveled, so be prepared for potential afflictions and heart attacks.
Heroes will suffer 25 stress after a successful retreat.
There are few things to keep in mind before attempting to retreat: Retreats are not guaranteed to work when desired (if the option is enabled) and will act like a turn skip (70% to succeed the first time then +5% for each other attempt). You can only interact with the retreat option when it is your hero's turn to act in combat. To retreat from battle, click on the white flag on the top left corner.