Querying XML Nodes with SQL
Base on your input data, I will do something like this:

select I.X.value('(key/text())[1]', 'varchar(50)') as ItemID,
       I.X.value('(value/text())[1]', 'varchar(50)') as Store
from @XML.nodes('values/Nationality') as O(X)
  cross apply O.X.nodes('item') as I(X);


ouptput

ItemID  Store
UK  def
IE  def